COMPETITION APPELLATE TRIBUNAL
NEW DELHI
CORAM
Hon’ble Mr. Justice G.S. Singhvi
Chairman
Hon’ble Shri Rajeev Kher
Member
Unfair Trade Practice Enquiry No. 234/1997
In the matter of :
1. Dipti Bhalla Verma
1322, Arun Vihar,
Sector 37,
NOIDA (UP)
2. Kunal Verma,
1322, Arun Vihar,
Sector 37,
NOIDA (UP)
3. Mrs. Pushee Bhalla,
64, Amit Estate,
Cross Road No. 3,
Andheri (West)
Mumbai – 400 058
4. Mrs. Dilnawaj Bhalla,
2507, Red Clover Road Court,
Reston VA,
22091, USA
….Complainants
Versus
M/s D.L.F. Universal Limited
Having its Office at DLF Centre,
Sansad Marg,
New Delhi-110001
Appearances :
… Respondent
Shri Vishwajit Singh, Advocate for the Complainants
Shri Ravinder Narain and
Advocates for the Respondent.
Ms.
Kanika
Gomber,
2
ORDER
Whether failure of the respondent to give possession of Apartment
No.1201
A,
Beverly
Park,
DLF
Qutub
Enclave
Complex
to
the
complainants at the end of two and a half years period counted from the
date of booking and whetherthe demand of additional cost (Extra
Charges)of Rs.8,87,825/- constitute unfair trade practice as defined
under Section 36A of the Monopolies and Restrictive Trade Practices Act,
1969 ( for short ‘the Act’) are the main questions which arise for
consideration in this complaint.
2.
In 1993, the respondent issued advertisementsin the newspapers
and through hoardings and invited bookings for the apartments in the
projects named as ‘DLF Beverly Park’ and/or ‘DLF Regency Park’. Copies
of the advertisements have been placed on record as Annexure –A (Pages
465 – 483 of the Paper Book) along with affidavit of R.W. 3, Shri K.
Swaroop. For the sake of reference, one of the advertisements on which
reliance was placed by learned counsel for the complainants during the
course of hearing (Page 476) is reproduced below:
NEVER BEFORE
HAS IT BEEN THIS EASY TO WIN
ONE OF THE FINEST APARTMENTS
SOUTH OF DELHI
WITHOUT REALLY HAVING THE MONEY
TO PAY FOR IT.
______________________________________________
FOR APARTMENETS IN
______________________________________________
DLF
BEVERLY
PARK
DLF
REGENCY
PARK
3
*Pay just 40% over the first 2½ years. *Move
in to yourexclusive apartment
*The balance could well come from the
rentals, you would otherwise have paid for
your home in Delhi.
An exclusive apartment in DLF Beverly Park or DLF
Regency Park now comes with more than superior
finishes, facilities and environment!
An amazing easy payment plan! Specially worked
out for you by DLF and Citihome.
All you need to put
together is just 40% of the price, and that too over 2½
years. That shouldn’t be too difficult – with loans from
you P.F. and possibly from your Company to supplement
your savings.
DLF will give you possession of your
apartment in 2½ -3 years.
So, you move into your
apartment. And then your Company pays the rent it was
paying your landlord in Delhi to you. And that could help
you pay the balance instalments to DLF over the next 77½ years. As simple as that. Even if you are currently
staying in your own property, you could rent out that
property to someone else and use that rent to finance a
second property – an apartment in DLF Beverly Park or
DLF Regency Park.
Drop in at DLF and check out the property options
and payment options today.
And you’ll have taken the
first step to owing your own home. Instead of paying rent
4
all your life and having nothing to show for it at the end
of it all.
The new DLF apartments and the DLF Citihome
Finance Programme. All you’ve ever warned in a home
now comes together. Beautifully.
Detailed terms and conditions
at the DLF office
_______________________________
DLF
DLF Centre, Sansad Marg
UNIVERSAL
New Delhi 110 001
LIMITED
Tel. 371 9300, 371 9320
Fax: (011) 371 9344
DLF
QUTAB ENCLAVE
THE FINEST ADDRESS SOUTH OF DELHI”
3.
Each of the advertisements contained the note ‘detailed terms and
conditions at the DLF Office’.
4.
Complainant Nos. 1 and 2 jointly submitted an application on
20.05.1993 for allotment of a residential apartment (Type Sterling) inDLF
Beverly Park, DLF Qutub Enclave Complex, Phase- II, Gurgaon. They
gave the choice of Apartment No. A in the first floor of Building No. 12
with super area of 224.82 sq. meters (approximately)and deposited
Rs1,93,596/- towards 10% of the sale priceunder 2.5 years payment
plan.Clauses 1, 4, 5, 9 and 11 of the Terms and Conditions embodied in
the Application Formread as under :
“Clause -1 : “The intending allottee(s) has applied for
allotment of a residential apartment with full knowledge
5
and subject to all the laws/notifications and rules
applicable to this area in general and group housing
project in particular which have been explained by the
company and understood by him/her.”
Clause - 4 : “The Company shall have the right to effect
suitable and necessary alterations in the layout plan of
the building or block of buildings, if and when found
necessary, which alternations may involve all or any of
the following changes, namely change in the position of
the apartment, change in the number of apartment / or
change in its dimensions or change in its area.
To
implement any or all of the above changes, supplement
agreement(s), if necessary, will be executed.
If there is
any increase/ decrease in the areas, the rate per sq.mtr.
and other charges will be applicable to the changed area
at the same rate at which the apartment was booked. If
for any reason the company is not a in a position to allot
the property applied for, the company shall refund the
amount deposited with simple interest @ 12% P.A.”
“Clause - 5 : “The intending allottee(s) shall not be
entitled to get the name of his/her nominee(s) substituted
in his/her place without the prior approval of the
company, who may, in its sole discretion, permit the
same on such terms as it may deem fit.”
“Clause-9: “The intending allottee shall additionally pay
on demand to the company his/her proportionate share
6
of the cost for the provision of external electrification
(including but not limited to installation of electric substation, meter box, electric standby generator) and all fire
safety measures (including but not limited to fire fighting
equipment and other accessories, materials and other
items required for the installation and use of the
aforesaid equipment.
In addition if due to subsequent
legislation/Govt. orders or directives or guidelines or if
deemed necessary by the Company, any further fire
safety
measures
are
undertaken,
the
proportionate
charges in respect thereof shall also be payable on
demand by the intending allottee.”
“Clause -11 : “The company shall endeavour to give
possession of the apartment to the intending allottee(s)
within a period of two and a half / three years from the
date of booking of the apartment on complete payment of
the Sale price and other charges due and payable upto
the date of possession according to the payment plan
applicable to him.
The company on completion of the
construction shall issue notice to the intending allottee,
who shall within 30 days thereof, take possession of the
apartment. In the event of his failure to take possession
for any reason whatsoever, he shall be deemed to have
taken possession. In case of 10 year payment plan, the
possession of the apartment shall, however, be delivered
to the intending allottee merely as a licensee fee which
7
shall be calculated at the rate of 18% per annum on the
diminishing balance due to the company for each quarter
and shall be paid along with the equated quarterly
instalments as per the payment plan.
In the event of
possession / deemed possession not being handed over,
the intending allottee shall continue to make payment of
the agreed equated
quarterly
instalments
including
interest @ 18% on reducing balance payment basis. The
licence fee shall, however, become payable from the date
the possession/deemed possession of the apartment is
handed over to the intending allottee. The licence fee of
18% shall be subject to increase in the events of an
increase in the bank rate / Reserve Bank of India
regulated rate from time to time subject to a maximum of
20%.”
[Underlining is ours]
5.
The respondent acknowledged the payment of 10% sale price
by issuing receipt of the same date.
Formal acceptance of the
application was communicated to Complainant No. 1 vide letter dated
29.05.1993.
6.
Complainant Nos. 1 and 2 paid the instalments of price
between 06.06.1993 and 30.12.1996 (Total Rs. 22,47,898/- including
10% deposited with the application and cost of two parkings). In the
midst of these payments, thecomplainants made requests for inclusion
of the names of Complainant Nos. 3 and 4. The respondent agreed to
do so subject to payment of Rs. 12,095/- as service charges.
After
8
some correspondence, Complainant No. 1 sent letter dated 05.10.1993
with the request that Rs. 12,095/- may be adjusted from the advance
already paid. The respondent accepted her request and this is how the
names of Complainants Nos. 3 and 4 were included in the category of
purchasers.
7.
After ten months of booking the apartments, the parties executed
Apartment Buyer’s Agreement dated 14.03.1994, the relevant portions of
the preamble and Clauses 2(b), 2(c), 4, 5, 11 to 16 and 18 of which are
reproduced below:“AND WHEREAS the Company plans to develop the
aforesaid site reserved for Group Housing described in
ANNEXURE
I
attached
with
this
agreement
by
constructing new multistorey buildings (which are to be
named
as
DLF
BEVERLY
PARK,
REGENCY
PARK
APARTMENTS) on the said land in accordance with the
Building Plan as may be approved by the Director, Town
& Country Planning Department, Haryana, Chandigarh
and the arrangement of the Company with the Associate
Companies herein-before mentioned.
AND WHEREAS the Apartment Allottee demanded from
the Company and the Company has allowed to the
Apartment Allottee inspection of the site, tentative
building plans, ownership record of the aforesaid site and
other documents relating to the title, competency & all
other relevant details.
9
AND
WHEREAS
the
Apartment
Allottee
after
fully
satisfying himself with the stated facts applied to the
Company for allotment of a Residential Apartment (to be
known as STERLING in one of the multi storeyed building
aforementioned.
AND WHEREAS the Company accepted the application of
the Apartment Allottee and allotted to him Apartment No.
A on 1st floor, having super area of approximately 224.82
sq. mtrs., and carpet area of approximately 202.99 sq.
mtrs. the percentage of carpet area being 90.19% of super
area
approx. in the proposed building(s) No. 12
(hereinafter referred to as “ the said premises”)
The
aforesaid areas and percentage are tentative and are
subject to change at the time of approval of the building
plans and also on completion of the construction.
AND WHEREAS a Proper Agreement of Sale on standard
format
of
the
Company,
is
being
executed
now
incorporating all the details embodied in the application,
and terms and conditions of sale, which shall form part
and parcel of this Apartment Buyer’s Agreement.
NOW THIS INDENTURE WITNESSETH and it is hereby
agreed by and between the parties hereto as follows:
THAT the Company hereby agrees to sell and the
Apartment Allottee hereby agrees to acquire the said
premises as detailed below at the rate mentioned against
10
it and upon the terms and conditions set out hereunder
as mutually agreed by and between the parties hereto.
Building No.
Apartment No. Super Area (Multi-)Rate
(Floor No.)
12
2(a)
1st
(Sq. Mtrs.)
(Rs. Per sq Mtr.)
224.82
8611.20
THAT the rate mentioned in clause 1 above is
inclusive of the cost of providing electric wiring and
switches in the said premises, but does not include the
cost of Electric fittings & fixtures, geysers, fans etc. which
shall be got installed by the Apartment owners at the own
cost.
Clause 2(b) :“The Apartment allottee shall additionally
pay on demand to the Company his proportionate share
of the cost for the provision of external electrification
(including but not limited to installation of electric substation, meter box, electric stand – by generator) and all
fire-safety measures (including but not limited to fire
fighting equipment and other accessories, materials and
other items required for the installation and use of the
aforesaid equipment). In addition, if due to consequent
legislation/Govt. orders or directives or guidelines or if
deemed necessary by the Company, any further life safety
measures are undertaken, the proportionate charges in
respect thereof shall also be payable on demand by the
Apartment allottee.”
11
Clause 2(c): “The Apartment Allottee shall pay a further
sum of Rs. 60,477/- (Rupees sixty thousand, four
hundred and seventy seven only) as preferential location
charges as per schedule of payments (Annexure II)
annexed hereto. However, if due to change in the layout
plan
and
consequent
change
in
the
allotment
of
Apartment, it ceases to be so located or there is a change
in the preferential location before or after the registration
of sale deed, the company shall be liable only to refund
without
interest
extra
charges
revered
for
such
preferential location or shall be entitled to recover extra
preferential location charges as the case may be.”
Clause 4 : The price of the apartment stipulated
hereinabove is based on the price of all materials and
labour charges pertaining thereto ruling on the 1st day of
January, 1993. If, however, during the progress of work,
there is increase in the price of the material used in the
construction work and/or labour charges on account of
any reason statutory or otherwise, the cumulative effect
of such increase as assessed by the company and
intimated to the apartment allottee shall be debited to the
Apartment allottees account who shall pay the same on
demand.
The decision of the company in this respect
shall be final and binding on the apartment allottee. The
increase incidence maybe charged and recovered by the
company from the apartment allottee with any one or
12
more of the instalments or separately but in any case
before giving possession or deemed possession of the
apartment.”
Clause 5
:That the prorate share of the Apartment
Allottee of the External Development Charges levied by
the Director, Town and Country Planning, Haryana as on
date
works
out
to
be
Rs.
376/-
per
sq.
meter
approximately on the super area and the same is being
charged separately as shown in the schedule of payments
(Annexure II) annexed hereto. However, any increase in
this levy hereafter shall also be to the account of
Apartment Allottee who shall pay the same to the
Company on demand. A provision to this effect shall be
incorporated in the conveyance Deed to be executed in
favour of the Apartment Allottee. The above agreed prorata share, however, would not cover additional expenses
which may have to be incurred by the State Government
on
account
of
enhancement
in
compensation
for
acquisition of land, for the purpose of providing external
services, expenses for arranging electric connection from
HSEB for electrification of the colony which includes site
for multistorey building(s) also.
These charges as and
when determined by the Director, Town and Country
Planning, Haryana are also payable as part of the
external development charges by the Apartment Allottee
on the same pro-rata basis as stated hereinabove.
13
Pending determination of the charges, the Apartment
Allottee shall pay the charges by way of Contingency
Deposit as adjustable security of Rs. 21.50 per sq. mtr. of
the super area as indicated in schedule of payments
(Annexure II) which will be adjusted on the determination
of the said charges by Director, Town &
Country
Planning, Haryana and any excess/shortfall thereof shall
be to the account of the Apartment Allottee.
The
Contingency Deposit shall carry simple interest at the
rate of 12% per annum during the period of its nonutilisation. However, in case of Non Resident Indians and
Foreign Nations of Indian Origin, the payment of interest
shall be subject to the approval of the Reserve Bank of
India. The Contingency Deposit as also the interest
thereon after deduction of Tax at source, if any, shall
continue to be available to the Company till the date of its
utilisation/refund as aforesaid.
Clause 11 : THAT the Apartment Allottee shall
not be
entitled to get the name(s) of his nominee(s) substituted
in his place.
The Company, may however, in its sole
discretion permit such substitution on such terms and
conditions including payment of such service charges as
it may deem fit.
Clause -12 : That the Apartment allottee confirms that he
has entered into this transaction with full knowledge and
understanding of the agreement and arrangement entered
14
into between the company and its associated companies
hereinbefore
stated,
and
subject
to
all
laws
and
undertakings given by the Company and its Associate
Companies to the Government of Haryana in this regard
and the Apartment Allottee has familiarised himself with
all the aforesaid agreements undertaking, conditions etc.
Clause 13 :
That the Apartment Allottee has accepted
the plans, designs,
specifications shown to him which
are tentative and are kept at the Company’s office at DLF
Centre, Sansad Marg, New Delhi and agrees that the
Company
may
make
such
variations,
additions,
alterations and modifications therein as it may, in its sole
discretion, deem fit and proper or as may be done by any
competent authority and the Apartment Allottee here-by
gives his consent to such variations and modifications.
Clause 14 :THAT the specifications and information as to
the materials to be used in construction of the Apartment
as set out in Annexure III attached hereto are also
tentative and the Company may make such variations
and modifications therein as it may, in its sole discretion;
deem fit and proper or as may be done by any competent
authority and the Apartment Allottee hereby gives his
consent to such variations and modifications.
“Clause15: That the Company shall, under normal
conditions, complete the said Multi-storeyed building(s)
15
as per the said plans and specifications seen and
accepted by the Apartment Allottee (with additional floors,
if
permissible)
with
such
additions,
alterations,
modifications in the layout and building plans and
specifications as the Company may consider necessary or
may be required by any competent authority to be made
in them or any of them while sanctioning the building
plans or at any time thereafter. No future consent of the
Apartment Allottee shall be required for this purpose.
Alterations may inter-alia involve all or any of the
changes in the apartment viz. change in position of the
Apartment, change in its dimensions, change in its area
or change in its number. To implement all or any of the
above change, supplementary sale deed or deeds, if
necessary will be got executed and registered by the
Company in Apartment Allottee. If, as a result of the
above mentioned alterations, there is either reduction or
increase in the covered area of the said premises or its
locations, no claim, monetary or otherwise will be raised
or accepted except that the agreed rate per sq. meter and
other charges will be applicable for the changed area.
Clause 16 :That the possession of the said premises is
proposed to be delivered by the Company to the
Apartment Allottee within two and half/three years from
the date of booking of the Apartment. The Company shall
not incur any liability if it is unable to deliver possession
16
of the said premises by the time aforementioned. If the
completion of the building(s) is delayed by reason of nonavailability of steel and/or cement or other building
materials, or water supply or electric power or slow down
strike or due to a dispute with the construction agency
employed by the Company, civil commotion or by reason
of war, or enemy action, or earthquake or any act of God
or if non-delivery of possession is as a result of any act,
notice, order, rule or notification of the Government
and/or any other public or competent authority or for any
other reason beyond the control of the Company and in
any of the aforesaid events the Company shall be entitled
to
a reasonable extension
of
time
for
delivery
of
possession of the said premises.
Clause 18 :
THAT, if for any reason, the Company is
unable or fails to deliver possession of the said premises
to the Apartment Allottee within the time specified in
clause no. 16 above, or within any further period or
periods as agreed to by and between the parties hereto,
then in such case, the Apartment Allottee shall be
entitled to give notice to the Company terminating the
Agreement, in which event the Company shall be at
liberty to sell and dispose of the said premises to any
person at
such
price
and upon
such terms
and
conditions as the Company may deem fit. The Company
shall within a reasonable time from the date of receipt of
such notice and sale of the premises, refund to the
17
Apartment Allottee the aforesaid amount of earnest
money and the future amount, that may have been
received by the Company from the Apartment Allottee as
part payment(s) in respect of the said premises. Neither
party shall have any other claim against the other in
respect of the said premises or arising out of this
Agreement.”
[Underlining is ours]
8.
Although
the
application
form
and
the
Apartment
Buyer’s
Agreement envisaged that the respondent will make an endeavour to
deliver the possession of the apartmentat the end of two and a half years
period, the needful was not done.
Instead, the respondent sent letter
dated 21.04.1997 spelling out the reasons for delay in the delivery of
possession.The relevant portion of that letter, which was sent to all the
buyers of apartments in Beverly Park and contained answers to the
queries made by the buyers is reproduced below :
21st April, 1997
Beverly Park – II
Dear Ms. Deepti B Verma,
We are in receipt of a large number of enquiries on
the progress in construction of Beverly Park Apartments.
At the outset, we apologise for delays or irregularities in
customer communication and assure you of prompt
service in future. We appreciate the patience shown by
you in the face of delay beyond our control. We on our
part are trying our best to make up for the delay.
We
18
have also been making continuous improvements in the
complex with a view to making Beverly Park a premier
residential development in the region.
As you might be aware, DLF Qutab Enclave is
progressing well. There has been a marked increase in
pace of habitation evident from construction activity in all
phases of the township.
The shops located in several
commercial complexes provide a wide variety of goods and
services to cater to all your daily needs. A 60 metre wide
six lane Sector Road from Delhi – Jaipur National
Highway to the heart of DLF to further augment the road
network in the region. Corporate Park in Phase III of the
township has been completed.
It will soon become the
home of a large number of Indian and multi-national
corporations such as Pepsico, GE Capital, Birla VXL,
RPG, Blue Star, and so on.
We are hopeful that this
trend of rapid development of DLF Qutab Enclave will
only accelerate in future.
We have analysed the feedback from our valued
customers and identified some major issues which we
shall try to address in detail in subsequent paragraphs.
Q.1.
What is the present A1.
Three tower cranes, a
status
mobile crane as also
construction
of
and
modern
when am I getting
such
the
Mixing Plan, concrete
possession
of
as
machinery
a
Batching
19
my apartment ?
pumps, passenger and
building
have
hoists
been
etc.
deployed
with over a thousand
skilled
artisans
labourers
and
working
_____ to complete the
apartments in Beverly
Park.
and
The structure
finishing
are
works
proceeding
simultaneously.
We
plan to give occupation
subject
to
obtaining
government
approval
in
March,
However,
we
1998.
shall
schedule our works in
a manner that you can
carry
fitments
work,
out
like
etc.
interior
wood
around
December, 1997. This
will enable you to move
into a fully functional
apartment soon after
20
handing over.
Q.2
Why this delay ?
A2.
This
is
delays
due
to
the
in
obtaining
government
approvals
as
also
major
improvements
out
by
carried
DLF
in
specifications
and
facilities in order
to
provide you a better
product.
Q.3
What
are
the A3.
improvements
We are carrying out a
large
number
of
carried out by the
DLF on the earlier
specifications
indicated
in
improvements
in
specifications in your
the
apartments,
in
agreement with us ?
addition
to
those
specified in Agreement
and Sales literature at
a
substantial
cost,
some of these are :
Ÿ Extra lift provided for
services/material
movement in each row.
Ÿ Large and impressive
entrance hall provided
21
at ground floor with a
double height.
Ÿ Large size terrazzo
tiles with high quality
chips for fewer joints,
better aesthetics and
easy maintenance.
Ÿ
Imported
marble
provided in living and
dining room and in the
passage
along
with
green marble for better
appearance.
Ÿ Study room, where
provided
will
wooden
have
parquet
flooring.
Ÿ
Hafeez
Contractor,
the leading architect,
has
imparted
Mediterranean
to
Beverly
a
tough
Park
through sloping roofs
and
other
distinctive
architectural features.
Ÿ Copper pipes used for
22
internal
the
plumbing
apartments
to
in
place of GI pipes for
longer
life
and
improved efficiency of
flow.
ŸImproved
specifi-
cations
of
High
Tensionelectrical
equipment to enhance
fire
safety
and
efficiency.
Ÿ
100%
standby
generators provided for
uninterrupted
supply
for
power
all
your
power needs including
airconditioning etc.
Ÿ _______ provided with
sprinkler system and
smoke detectors for fire
protection.
Ÿ Improved structural
system
greater
to
provide
earthquake
resistance as well as a
23
better finish.
Q.4
I chose to live in A4.
Beverly
Park
for
greater
security.
Please
indicate
measures taken by
you
for
enhanced
We
have provided a
security
system
consisting of features
like :
Ÿ Electrical barrier at
security ?
gate which will prevent
entry of unauthorised
persons.
Ÿ Card operated barrier
at
ramp
prevent
entry
entry
to
of
unauthorised vehicles.
Ÿ Closed circuit TV at
ground floor entries of
each tower and in the
basement.
Ÿ Proxy Card with key
board
operation
at
ground floor entry to
the lobby which will
allow
only
Card
holders
access
to
apartments.
You will
however
able
be
to
open the lobby door for
24
your visitors from your
apartment itself.
Ÿ 24 Hour manning of
the
complex
at
its
entry to further boos
security measures.
Q. 5
Would I have to pay A5.
for
all
these
DLF
has
incurred
substantial
additional
expenditure
in
improved
specifications ?
providing you with the
superior
residential
facilities
in
complex.
hopeful
the
We
that,
are
as
a
result, you will receive
a better product than
the
one
contracted
keeping
you
had
for.
In
with
commitment,
DLF’s
the
original
basic
sales
price
for
your
apartment, in terms of
Rs. Per sq. mtr. shall
remain
unchanged.
The cost of providing
25
external electrification
including
24
hour
back-up
power
and
enhanced
fire
safety
measures
i.e.
smoke
detection
and
sprinklers etc. in terms
of Clause 2(b) of the
Apartment
Buyers
Agreement
included
other
shall
be
along
items
with
in
the
computation
of
recoverable
charges.
The final figures shall
be communicated in a
month’s time.
Q.6.
Have there been any A6.
change
in
carpet
There
has
significant
been
no
change in
and super areas ?
Let us have details
in this regard.
the
carpet
areas
of
apartments. The super
area
has,
however,
increased due to the
inclusion
additional
third
lift
of
a
area
and
club,
for
larger
26
lobbies,
laundromat,
cable TV, Estate and
maintenance
office.
Excluding penthouses,
this increase in super
area
of
your
apartments
is
100
ft.
per
and
the
sq.
apartment
below
exact details will be
communicated to you
by
our
Commercial
Department.
The
additional area shall be
payable in accordance
with the Agreement.
Q.7
What benefit would A7.
be
the
third
provide me ?
lift
construction
third
lift
will
provided an additional
Has
its inclusion led to
delay
The
in
facility for carriage of
goods
and
baggage
leaving greater freedom
schedule?`
for
your
movement.
The
incorporation
of
the third lift has meant
a complete change in
core
structure
27
resulting in not only
cost over runs but also
a delay in obtaining
Govt.
approvals.
However, we feel that it
is
a
part
of
DLF’s
commitment to provide
a quality product to its
valued customers.
Q.8
There
has
been A.8.
delay in completion
of
Beverly
cost for the contractual
construction.
Why
should we bear the
escalation ?
will bear the escalation
Park
apartment
additional
It is clarified that you
cost
period
only
accordance
with
in
the
of
Agreement.
absorb
and
all
DLF will
escalation
other
indirect
costs for the period of
delay,
beyond
contracted period.
the
It
may be noted that the
base
data
computation
escalation
for
of
charges
shall be in accordance
with
the
Agreement
28
with
final
material
prices
and
of
labour
frozen as on the last
day of the contracted
period.
All
changes
price-
beyond
above
frozen
the
price
levels shall be entirely
to the account of DLF.
Q.9.
Could you elaborate A9.
on
facilities
ŸThe Club will be for
the exclusive use of
plannedin the club ?
residents
of
Beverly
Park and their guests.
Ÿ
It
will
have
a
swimming pool, tennis
court
and
fitness
facilities.
Ÿ The built up area of
the
Club
has
included
in
been
the
common area for the
purpose of calculating
super
area
of
apartments.
further
payment
the
No
will
need to be made by
29
you for the admission
and
security
deposit
for exclusive access to
the
club.
Only
operation
and
maintenance
in terms of
charges
clause 31
of the Agreement will
be payable by you in
addition to any direct
cost
that
you
may
incur in the club itself.
Q.10.
Is
a
plan A10.
loan
available from any
housing
You will be pleased to
learn
that
CITIBANK
finance
bank to meet the
escalation
costs,
payment
for
provides loan for this
purpose.
You
are
requested to contact :
increase in areas as
also
external
electrification
and
fire fighting costs ?
Ms.Katherine/Ms.
Mitika, Shelters
Kanishka
Shopping
Plaza, 1st Floor, 19th
Ashoka
Road,
NEW
DELHI – 110 001.
Tel. 3354499
Fax : 3352474
Ms. Anju/Ms. Rajini
30
Shelters
M-32, Market Complex
Greater Kailash – II
NEW DELHI – 110 048.
Tel.
:6215492,
6215367, 6440775
Fax. : 6210619
You
will
that
appreciate
the
above
arrangement
entirely
will
between
be
you
and Citibank.
Q.11
Can I carry out any A11.
modifications to the
You may carry out the
modifications to your
Apartment such as
changing
the
flooring
and
knocking-off
the
apartment as per the
following conditions:
Ÿ As a principle, load
wall to improve the
interiors
of
apartment ?
my
bearing walls are never
removed or altered as
they
could
the
safety
endanger
of
the
structure.
Ÿ Any alterations can
only be carried out in
accordance
with
the
31
Building
Bylaws
Department
of
of
Town
and Country Planning,
Haryana.
In order to
facilitate your decision
making, we shall be
providing you a set of
technical
blueprints
clearly
indicating
modifications that can
be undertaken in this
structure.
We shall
also provided Beverly
park
Manual
at
the
time of handing over
which
will
guidelines
contain
in
this
regard as also details
of various maintenance
services
issues
and
that
other
concern
your apartment.
Q.12
I
the A13.
believe
proximity
of
apartments
in
Mehrauli –Gurgaon
road
result
is
likely
in
to
noise
In the first instances,
we would like to dispel
your
fear
of
noise
pollution. Beverly Park
32
pollution.
DLF
How has
tackled
this
is 50 M from the main
road
with
an
problem ?
intervening green belt
of 30M width on both
sides
of
the
road.
Additionally, we have
provided French type
aluminium doors and
windows
fixed
with
proper gaskets/
sealants
to
make
Beverly Park as free of
noise
and
dust
possible.
Another
important
Beverly
as
feature
Park
is
swing/hung
of
the
type
aluminium doors and
windows
normal
instead
sliding
of
doors
and windows in other
apartments.
This will
result in elimination of
noise
during
windy
days due to rattling,
etc.
Even
though
33
expensive,
we
worked
have
towards
providing
you
lower
nose levels to
make
apartment
living
a
pleasure.
Q.13.
There are far
many
too A13.
problems
regarding
agree
that
power
supply
HSEB
tends
the
from
Power
supply from HSEB,
what
We
do
you
propose to do about
erratic.
to
DLF
therefore,
be
has,
provided
a
it ? What is the
difference
between
power back up for
common
areas
as
complete power backup for all services and
the
needs
of
envisaged in earlier
Sales literature and
in
the
arrangement ?
new
apartments,
including
air-conditioning.
earlier
back-up
arrangement
envisaged
supply
areas
present
The
had
power
to
only.
common
The
arrangement
will obviate the need
for individual portable
generators/invertors,
thus culminating the
34
smoke
and
nose
pollution.
Diesel
generating sets within
the
complex,
will
supply the total power
requirement
in
the
event of disruption of
supply
from
HSEB.
Since the capital cost
for 100% power supply
would
have
already
been
recovered
as
clarified in Answer 5
above,
you
shall
be
responsible to pay for
the fuel, operating and
maintenance costs for
power supplied to you
through these gensets.
Q. 14
In case I am unable A14.
to
move
into
apartment,
my
lease
apartment ?
have
set
up
a
rental/leasing division
what
can DLF do to help
me
We
my
of
DLF
Parliament
Centre,
Street
facilitate
the
corporatisation
Gurgaon
to
as
of
also
to
35
meet the demand of
high
income
families
moving into DLF Qutab
Enclave. We maintain
a data bank of various
kind
of
houses,
condominiums, shops,
offices
available
for
lease/rent as also of
prospective
wishing
tenants
to
live
pollution
in
free
environment
of
your
township.
A
few
lease/rental
brokers
have been authorised
by DLF to help our
valued customers lease
their properties. These
brokers are also given
assistance in drafting
of rent/lease deeds as
also advice on various
regulations
in
force.
Should
you
be
interested
in
renting
36
your apartment, please
get in touch with Lease
and
Rental
Division,
Marketing Department.
While we shall be glad
to facilitate the renting
of your apartment, the
lease
will
a
private
contract between you
and the lessee.
be
It will
appreciated
that
DLF will not be a party
to the transaction.
Q.15.
I had purchased one A15.
parking space but
find
that
I
another
A limited number of
parking spaces are still
need
to
accommodate
my
second car.
Can
available and you are
requested to indicate
your
requirement
in
you help me?
the enclosed feedback
form so that we can
process
your
requirement.
Q.16.
What are my final A16.
dues?
Your
total
dues
are
being worked out and
our
Commercial
Department
will
37
despatch a Statement
of
Account
in
this
regard in a month’s
time.
From the perusal of above, you will appreciate that
we have carried out a number of improvements in Beverly
Park to bring you an apartment that will match your
expectations. Even though it has taken some time, we do
hope that the wait has been worthwhile. We also hope,
that this communication has clarified most of the issues
raised by you. We are enclosing a feedback form that will
enable you to indicate your plans and concerns in order
to help us serve you better.
We shall appreciate your
filling up the form and early return to us. We shall
continue the despatch of these updates till the delivery of
your apartment.
Should you need any further details
including information on site visits, kindly get in touch
with Ms. Valsala, Sr. Manager Commercial.
With kind regards,
Yours truly,
For DLF UNIVERSAL LIMITED
T.C. GOYAL
Executive Director”
9.
After one month and ten days, the respondent sent letter dated
02.06.1997to Complainant No. 1 for payment of extra charges of
38
Rs.8,87,825/- in four instalments of Rs. 2,21,956/-. That letter reads as
under:02.06.97
“MRS. DEEPTI B.VERMA
C/O MAJ. GEN. A.K.VERMA
1322, SECTOR 37,
ARUN VIHAR
NOIDA (U.P.) 201 – 303
Dear Sir/Madam,
Re: Your apartment no. 1201 A in DLF Beverly Park
This is further to our communication dated April 24, 1997.
We would now like to intimate to you the extra charges, payable by
you, over and above the amounts that were part of the payment
plan for the captioned property, which works out to Rs. 887825.00
as per details below:1. Cost increased on account of increase in area by 17.776 sq.
mtrs.
Allotted area ( sq. mtrs.) 224.820
Revised area (sq. mtrs.)
242.596
At the original rate
Basic Sale Price
Preferential Location Charges
External Development Charges
Rs. 153083.00
Rs.
4781.00
Rs.
6681.00
-------------------Rs. 164548.00
2. Escalation charges on ‘material and labour’
worked out for the contracted period only,
payable in terms of Clause No. 4of the agreement :Rs. 1541.83 per sq.mtr. :
( Rs. 143.24 per sq. ft.)
Rs. 374043.00
3. Cost in terms of Clause No. 2(b) of the agreement
(a) External electrification including 24 hour backup power, sub-station and DG sets etc.:Rs. 910.63 per sq.mtrs.)
( Rs. 84.60 per sq.ft.)
Rs. 220915.00
39
(b) Fire fighting measures including sprinkler system
And smoke detectors:Rs. 528.94 per sq.mtr.
( Rs. 49.14 per sq.ft.)
Rs. 128319.00
-----------------Rs. 887825.00
------------------
With a view to make it convenient for you to make the remittance of
the above amounts, we would request you to kindly let us have the
same in four equal instalments, as under:30.07.97
Rs.
221956.00
15.09.97
Rs.
221956.00
31.10.97
Rs.
221956.00
15.12.97
Rs.
221956.00
We would appreciate your making the payments by the above
prescribed dates.
Thanking you,
Yours faithfully,
For DLF Universal Limited
Sd/( VALSALA)
MANAGER COMMERCIAL”
10.
Soon after receiving the aforesaid letter, the complainants filed
complaint under Section 36-A accusing the respondent of indulging in
unfair trade practice.The substance
of the case set
up by the
complainants is that they were induced by the advertisements issued by
the respondent in 1992-93 and agreed to book the apartment on the basis
of assurance given by the officials of the respondent that the possession
40
shall be handed over latest at the expiry of 2½ to 3 years from the date of
booking; that they paid the instalments of price and also executed the
Apartment Buyer’s Agreement but possession was not given at the end of
2½ years.
The grievance made by the complainants is reflected in the
averments contained in paragraphs 2 to 5, 7, 16 to 22 of the complaint,
which are reproduced below :
“2.
1993,
That the Respondent Company in the years 1992extensively
advertised
hoardings
and
other
publicity material, inviting bookings for apartments in
their proposed apartment complex by the name of DLF
Beverly Park Apartments at Gurgaon (Haryana).
3.
That induced by the said advertisements of the
Respondent, the Applicants No. 1 and 2 met the officials
of the Respondent Company on various occasions in the
year 1993.
The Applicant Nos. 1 and 2 were in dire need of
residential accommodation. The Applicant Nos. 1 and 2,
acting upon the assurances given by the officials of the
Respondent
Company
that
the
possession
of
an
apartment in the project in question shall be handed
over to them latest at the expiry of two and a half/three
years from the date of the booking of the Apartment,
agreed to book an apartment in the said project.
4.
That on 20.5.1993, the Applicant Nos. 1 and 2
booked an Apartment No. 1201 A at Beverly park-II, DLF
Qutub Enclave Complex and paid a sum of Rs.
41
1,93,596/- towards registration money in respect of the
said
apartment,
Consideration.
being
10%
of
the
total
Sale
Copies of the letter dated 29.5.1993 of
the Respondent acknowledging the booking of the said
Apartment
and
payment issued
the
acknowledgement
by the
Respondent
of
the
Company
said
are
appended herewith and marked as ANNEXURE C-2.
5.
That the Applicant Nos. 1 and 2 by booking the
said Apartment, with the Respondent Company and
entered into a payment plan according to which the
balance payment of the sale consideration of Rs.
19,35,960/- in respect of the said apartment was to be
paid in periodic instalments over a period of two and a
half years from the payment of the aforesaid booking /
registration amount.
Additionally, the Respondent
charged certain other monies, over and above the
aforesaid sale consideration, towards, inter alia, External
Development Charges, Preferential Charges, Contingency
Security Deposit, maintenance security etc. thereby
making the total sum payable to the Respondent as Rs.
21,00,803/-.
The said monies were to be paid to the
Respondent Company within the time period mentioned
hereinabove.
7.
That it may not be out of place to mention that in
terms of the agreement entered into by the parties, the
said Apartment was to be delivered to the Applicants
42
within a period of two and a half/three years from
20.5.1993 and which period came to an end in the
month of November, 1995. The Applicants had duly paid
all the instalments in respect of the said Apartment
within the time stipulated in the payment plan and
which period ended in November 1995.
15.
That under pressure from the Respondent –
Company to pay the said additional demand of Rs.
12,095/- for the additions of the said names, the
Applicant Nos. 1 and 2, vide their letter dated 5.10.1993,
forwarded the documents desired by the Respondent
Company and requested the Respondent Company to
adjust the said sum of Rs. 12,095/- for the addition of
the
names,
against
the
monies
advanced
to
the
Respondent Company by the Applicant Nos. 1 and 2. A
copy of the said letter dated 5.10.1993 is appended
herewith and marked as ANNEXURE C-9.
The Applicants reiterate that the said demand
raised by the Respondent Company is wholly arbitrary,
illegal and in flagrant violation of the terms of the
Agreement entered into between the parties.
The
monies so adjusted by the Respondent Company are
liable to be refunded to the Applicants alongwith interest
accrued thereon till the date of realisation.
43
16.
letter
That the Respondent Company under the cover of
dated
incorporating
12.11.1993
the
additional
forwarded
names
Agreement
as
set
out
hereinabove and confirmed the adjustment of Rs.
12,095/- towards the credit of “Service Charges” out of
the advance monies paid by the Applicants to the
Respondent Company.
Accordingly, on 14.3.1994, the Applicant Nos. 1 to
4, executed an Agreement of Sale with the Respondent.
A copy of the aforesaid standard format agreement dated
14.3.1994, drawn and drafted by the Respondent
Company,
is
appended
herewith
and
marked
as
ANNEXURE C-10.
17.
That the Applicants, duly paid the remaining
instalments to the Respondent Company.
It may be
noted that as a majority of the instalments paid by the
Applicants towards the sale consideration of the said
Apartment were paid before their scheduled date of
payment, the Respondent Company as a matter of
practice gave a rebate/concession in the total sale
consideration, the Applicants for the instalment paid
ahead of schedule @ 18% simple interest of the amount
of such instalment. The payment plan in respect of the
said Apartment, as stated before, ended on 20.11.1995
with Applicants paying the last instalment of Rs.
73,890/- to the Respondent Company.
44
The Applicants, after having paid the entire sale
consideration by the month of November, 1995, received
a circular / letter dated 24.4.1996 from the Respondent
stating, inter alia, that instalments / payments made by
the Allottees before the due date would be entitled to an
interest @ 20% p.a. with effect from 1.4.1996, as against
the 18% p.a. given earlier. The Applicants submit that
the Applicants have been deprived of the benefit of this
enhancement in the rate of interest by the Respondents.
The Demand Notices issued by the Respondent
time and again, reveal that the allottees would be liable
to pay to the Respondent Company, interest @ 20% p.a.
on delayed payments. This is also the stipulation as laid
down in clause 10 of the said Agreement.
This, the
Applicants submit, puts an implied obligation on the
Respondent Company to pay interest to the Applicants at
least on the same rate as aforesaid and in fact at the
market rate @ 24%
on the monies paid by the
Applicants, for the period of delay in handing over
possession of the said apartment.
In addition to the aforesaid loss sustained by the
Applicants on account of the failure of the Respondent to
perform their part of the contract within the time agreed
upon by the parties, the Applicants are being deprived of
utilising the huge amount of money paid by the
Applicants to the Respondent, in any other alternative
45
manner. The Applicants are liable to be compensated by
the Respondent, on this account as well.
18.
That from a perusal of the Agreement entered into
between the parties, it will be abundantly clear that time
was the essence of the contract. The parties had entered
into the contract with the clear understanding as has
also been clearly laid down, inter alia, in Clauses 16 and
18 of the said Agreement that the possession of the
Apartment in question would be handed over to the
Applicants within two and a half/three years from the
date of booking thereof.
The Applicants submit that the said Apartment
having been booked on 20.05.1993 by payment of 10%
of the total sale consideration by the Applicants to the
Respondent, the possession of the said Apartment, was
to be handed over to the Applicants, at the expiry of two
and a half/three years of the said date and which period
ended in the month of November, 1995. The possession
of the said Apartment has not been handed over to the
Allottee till date thereby causing grave loss, financial
injury and undue hardship to the Applicants.
19.
That after waiting for a reasonable time after
having
paid
the
entire
sale
consideration
to
the
respondent, the Applicants made enquiries as regards
the status of the said apartment and the reasons for the
failure of the Respondent to hand over the possession of
46
the same. After repeated visits and numerous telephone
calls made to the Respondent, the Applicants received a
circular/letter
dated
21.4.1997,
informing
the
Applicants, inter alia, as under :-
Ÿ
That the said Apartments were still under
construction
and
that
the
Respondent
was…… “planning to give occupation subject
to obtaining government approval in March,
1998.”…… “there were delays in obtaining
Government approvals…….”.
Ÿ
That the Respondent was in the process of
computing certain extra charges towards
alleged escalation costs and that the “total
dues” payable by the Applicants would be
sent to the Applicants shortly.
A copy of the said letter dated 21.4.1997 is
appended herewith and marked as ANNEXURE C11.
20.
That the Applicants submit that the reason of non
approval by the Government sought to be given by the
Respondent
apart
from
being
ambiguous is grossly frivolous.
wholly
vague
and
In any event, as
represented by the Respondent in the said Agreement
entered into between the parties, the entire project had
received approval of the Government / Competent
Authority prior to the commencement of construction at
47
the site. The Applicants fail to understand this absurd
reasoning now sought to be given by the Respondent
after the lapse of more than 19 months from the
scheduled time of handing over of possession of the said
apartment.
The proposed extra charges sought to be levied by
the Respondent at this stage are wholly unexplained and
no cogent reasoning has been given for the levy of the
same, especially when the entire due amount as
demanded
by
the
Respondent
in
respect
of
the
Apartment on question had already been paid to the
Respondent way back in November, 1995. The proposed
levy is wholly arbitrary, without any basis and liable to
be quashed by this Hon’ble Commission.
21.
That the applicants submit that the actions of the
Respondent in failing to hand over the possession of the
said apartment and to not to pay interest on the amount
paid by the
Applicants
constitute an Unfair
and
Restrictive Trade Practices, and the action of the
Respondent is opposed to public policy. Thus it will be
evident that there has been a gross deficiency in the
services provided by the Respondent to the Applicants.
22.
That the Applicants were shocked to receive
another
communication
Respondent
Company,
dated
2.6.1997
whereby
“extra
from
the
charges”
amounting to Rs.8,87,825/- have been levied on the
48
Petitioner towards the said Apartment, in the following
manner :1.
Cost increased on account of increase in area by
17.776 sq. metres :Basic sale price
Rs. 1,53,083.00
Preferential location charges
Rs.
4781.00
External Development charges
Rs.
6684.00
Rs. 1,64,548.00
2.
Escalation charges n ‘material and labour’ worked out
or the contracted period only, payable in terms of
Clause No. 4 of the agreement
Rs. 1541.83 per sq. mtr.
Rs. 3,74,043.00
(Rs. 143.24 per sq. ft.)
3.
Cost in terms of clause No. 2 (b) of the Agreement :
(a)
External electrification including 24 hours
Back-up power, sub-station and DG sets etc.
Rs. 910.63 per sq. mtr. :
Rs. 2,20,915.00
(Rs. 84.60 per sq. ft.)
4.
Fire fighting measures including sprinkler
System and smoke detectors :
Rs. 528.94 per sq. mtr.
Rs. 1,28,319.00
(Rs. 49.14 per sq. ft.)
_________________
Total :
Rs. 8,87,825.00_
49
The Applicant submits that the said imposition of
extra charges is wholly arbitrary, whimsical and with
ulterior motives.
The Applicant states that the said
charges have been imposed without giving any basis
thereof as will be evident from the following :(i)
That the extra charges of Rs. 1,64,548.00 levied on
account of alleged increase in the area of the
Apartment by 17.776 sq. mtrs. is grossly unfair
and arbitrary, in that the Respondent Company
has failed to communicate to the Applicants the
basis on which the said area has allegedly been
increased, what was the extra construction carried
out so as to increase the said area.
As will be
evident from Item No. 1 above the Respondent has
levied Rs. 4781.00 towards preferential location
charges.
The
Applicants
submit
that
the
Applicants had at the time of the booking of the
said Apartment paid a sum of Rs. 60,000/towards
preferential
location
charges.
The
Applicants failed to understand as to why the said
charges are being imposed against and on what
basis.
(ii)
The
Respondents
have
levied
a
sum
of
Rs.374043.00 towards alleged escalation charges
on material and labour worked out as per clause 4
of the Agreement between the parties.
Without
prejudice to the contention of the Applicants that
50
the said clause of the Agreement is per-se unfair,
the Applicants submit that in levying the said
escalation charges the Respondent Company has
acted in a most unfair and whimsical manner, in
that the Respondent Company has failed to
disclose the basis on which the escalation in costs
of material and labour has been computed.
The
Respondent Company has failed to communicate
to the Applicants the actual escalation in costs of
material and labour, if any.
The said demand is
liable to be quashed on this ground alone.
(iii)
The
imposition
Rs.1,28,319.00
of
by
Rs.
the
2,20,915.00
Respondent
and
Company
towards external electrification including 24 hour
back-up power, sub-station DG Set, etc. and fire
fighting
measures
respectively
is
wholly
unaccounted for as the Respondent Company has
failed to give the particulars of the said expenses
allegedly incurred by the Respondent Company.
A copy of thecommunication dated 2.6.1997 of the
Respondent Company is appended herewith and marked
as ANNEXURE C-12.
In any event, the Applicants submit that the
imposition of Rs. 8,87,825.00 as extra charges, which
amount
is
consideration
approximately
agreed
50%
between
of
the
the
entire
parties
sale
is
51
disproportionately high, unfair and arbitrary and the
said demand is liable to be quashed.”
11.
Along with the complaint, the complainants filed an application
under Section 12-A of the Act for issue of a direction to the respondent to
deliver possession of the apartment booked by them by asserting that
they had already paid a price and fulfilled their obligations under the
Apartment Buyer’s Agreement.
12.
In the reply filed on behalf of the respondent, preliminary objections
have been raised to the maintainability of the complaint on the ground
that it does not contain specific allegation of unfair trade practice and
there is non-compliance of Regulation 76 of the Monopolies and
Restrictive Trade Practices Commission Regulations, 1991 read with
Regulation 45 thereof.
On merits, it has been pleaded that the
complainants are bound by the terms of Apartment Buyer’s Agreement
and the same cannot be dubbed as arbitrary and one sided. According to
the respondent, the demand of extra charges has been made in
consonance with the Apartment Buyer’s Agreement and the complainants
are bound to pay the same. The respondent has relied upon Clauses 1, 4,
5, 9 and 11 of the terms and conditions of the application made by
Complainant Nos. 1 and 2 and Clauses 2(b), 2(c), 4, 11, 12, 13, 14, 15, 16
and 18 of the Apartment Buyer’s Agreement in support of its plea that
there has been no violation of Section 36-A of the Act. The respondent
has also pleaded that neither any misrepresentation was made about the
time-schedule for delivery of possession nor any assurance was given that
that the possession of the apartment will be given at the end of 2½ / 3
years.
It has relied on Clauses 16 and 18 of the Apartment Buyer’s
52
Agreement to buttress the assertion that the delivery of possession within
2½ years was not mandatory. The respondent has also accused the
complainants of not depositing extra charges levied on account of
increase
in
the
electrification etc.
area
of
apartment,
escalation
charges,
external
Paragraphs 4.8 to 4.15, 6 to 10 and 18 and 20 of the
reply, which are reflective of the case set up by the respondent are
reproduced below :
“4.8 The Respondent vide circular letter dated 21.4.97
informed the Applicants that the Respondent has
undertaken the task of upgradation of the Beverly
Park Scheme so as to ensure that the completed
and furnished Apartment are far more superior in
quality and standard. The Respondent are carrying
out a large number of improvements in the
Apartment which includes among other things :
1.
Extra lift provided for services/material movement
in each tower.
2.
Large and impressive entrance hall provided at
ground floor.
3.
Large size terrazzo tiles and imported marble
provided.
4.
100%
standby
generators
provided
for
uninterrupted power supply.
Moreover the additional cost incurred on all the
improvements/alterations being carried out has
been borne by the Respondent itself and the liability
53
has not been passed over to the customer. It was
further
communicated
that
the
delay
in
alterations/variations being carried out by the
Respondent which are being done keeping in mind
the
interest
of
the
customer
and
for
their
convenience only and the delay was also because of
the
delay
in
getting
the
approval
from
the
Government which is sought from time to time in
stages.
Copy of letter dated 21.4.97 is appended
hereto and marked Annexure H.
4.9.
That under clause 16 of the Apartment Buyers
Agreement, it has been specifically enumerated that
Respondent’s PROPOSED to deliver possession of
the Apartment in 2-½-3 years.
However the
Respondent shall not incur any liability of it is
unable to deliver possession of the said premises by
the aforementioned time. In terms of clause 18, in
case there is a delay in delivery of the Apartment
within the stipulated time, the allottee has the
liberty to terminate the Agreement and will be
entitled to a refund of earnest money and other
further amounts paid to the Respondent.
4.10. That the Applicants failed to give notice under
clause 18 of the Apartment Buyers Agreement to
the Respondent and has instead filed the present
complaint which is clearly not maintainable.
54
4.11. That the Respondent vide letter dated 2.6.97
communicated to the Applicants that are liable to
pay Rs. 8,87,825.00 as extra charges leviable on
account of increase in area by 17.776 sq. mtrs. of
the Apartment; Escalation charges on ‘material and
labour’; cost for external electrification and fire
fighting measures.
That all the aforesaid charges
were levied in accordance with the terms of the
Apartment Buyers Agreement. The letter dt. 2.6.97
is annexed hereto and marked Annexure I.
4.12. That the area determined at the time of allotment of
the Apartment along with the common space is
always tentative and approximate as each and every
project
invariably
undergoes
certain
changes,
alterations and modifications during the currency of
the project which fact has clearly been enumerated
in the preamble and under Clause 15 of the
Apartment Buyers Agreement.
4.13. That the Escalation charges has been levied as per
clause 4 of the Agreement and these changes
represents an increase of only approximately 6%
per annum for the contracted period on material
and labour.
4.14. That
the
charges
levied
towards
external
electrification and fire fighting measures are in
55
accordance with clause 2(b) of the Agreement.
External electrification includes 24 hours backup
power sub station, DG sets etc.
The total cost
incurred on material, labour, works, contracts and
installation have been prorated over the entire built
up area.
4.15. That the Applicants have failed to make payment of
the instalments in time.
Two cheques issued on
12.8.93 against instalment No. 4 for a sum of
Rs.50,000 and Rs. 1 lakh were dishonoured due to
insufficient funds.
The Applicants have not paid
the instalments in time, thereby violating the terms
of the agreement and instead filed the present
complaint before the Hon’ble Commission which
ought to be dismissed.
That the Applicants are
bound by the terms of the contract and the
Applicants have failed to perform their part of the
contract.
6.
Contents
of
paragraph
3
of
the
complaint are incorrect and denied.
purported
It is denied
that any assurances were given by the officials of
the Respondent Company that the possession of an
Apartment in the project shall be handed over to
them on expiry of 2-1/2-3 years from the date of
booking of the Apartment. It is further denied that
the Applicants were induced by the advertisements
56
of the Respondent to meet the officials of the
Respondent.
7.
Contents of para 4 of the purported Complaint
needs no reply being a matter of record except to
state that the Applicants have not disclosed the
Application
Form
containing
the
‘terms
and
conditions’ as referred to above.
8.
Para 5 of the purported Complaint needs no reply
being a matter of record except to state that the
Applicants are liable to pay Escalation charges on
material and labour for the contracted period in
accordance with Clause 4 of the Apartment Buyers’
Agreement; for the increase in the area of the
Apartment in terms of the preamble and clause 15
of the Apartment Buyers’ Agreement and also other
additional costs incurred on account of external
electrification,
fire
fighting
measures
etc.
in
accordance with clause 2(b) of the Apartment
Buyer’s Agreement.
9.
Contents of para 6 of the purported Complaint are
wrong and denied.
As stated above that the
Applicants have failed to make payment of the extra
charges in terms of the provisions of the agreement
which were as follows:(a)
Increase in are;
57
10.
(b)
Escalation charges;
(c)
External electrification; and
(d)
Fire fighting equipment.
Contents of para 7 of the purported Complaint are
incorrect and denied.
It is denied that the
Apartment was to be delivered in and about
November, 1995. As stated above clause 16 of the
Apartment Buyers Agreement makes it clear that
the possession of the premises was PROPOSED to
be delivered by the Company within 2½ -3 years
from the date of booking of the Apartment.
In
Clause 18, it is further provided that the Allottee is
at liberty and is entitled to give notice to the
Respondent terminating the Agreement in case of
delay on the part of the Respondent to deliver
possession of the Apartment and the allottee will be
entitled to refund of the earnest money and further
amounts that may have been received by the
Respondent from the allottee towards the cost of the
Apartment.
It is further denied that the Applicants have made
all the payments in time.
The Applicants have
infact, failed to make payment of instalment No. 4
in time. The cheques issued against Instalment No.
4
dated
12.8.93
were
dishonoured
due
to
insufficient funds. The Applicants have violated the
58
terms of the Agreement and miserably failed to
perform
their
part
of
the
Agreement.
The
Applicants also failed to make the payment accrued
upon them on account of escalation charges, on
material and labour; charges for increase in area of
the
Apartment;
External
electrification;
Fire
Fighting etc. as communicated to them vide letter
dated 2.6.97.
The Applicants instead of making
payments as per the provisions of the Apartment
Buyer’s Agreement, have approached the Hon’ble
Commission with unclean hands in so far as not
disclosing before the Hon’ble Commission the fact
that all the charges as levied from time to time are
in accordance with the terms and conditions as
provided in the Apartment Buyer’s Agreement.
18.
Contents of Para 15 of the purported Complaint are
misconceived, incorrect and denied.
It is denied
that the demand raised by the Respondent is wholly
arbitrary or illegal or in violation of the terms of the
Agreement entered into between the parties. It is,
however, reiterated that the demands raised by the
Respondents are strictly in accordance with the
Agreement, terms and conditions of which were
agreed, accepted by the Applicants.
The service
charges demanded by the Respondent was in lieu of
the expenses incurred by the
Respondent in
59
effecting
the
mutation
in
the
title
deed
or
amendment in the title of the allottees. It is further
denied that the Respondents are liable to refund
any money/amount to the Applicants. Nor do the
Applicants have any right to any interest on any
amount whatsoever from the Respondent.
20.
Contents of para 17 of the purported Complaint are
totally misconceived, incorrect and denied except
the fact that till 24.4.96 the Respondent gave a
rebate/concession in the total sale consideration to
the allottes who paid the instalments before the due
date or paid ahead of schedule at the rate of 18%
per annum.
Subsequently, after 24.4.96, the
Respondent revised its earlier policy of giving rebate
equivalent to interest at the rate of 18% per annum,
by increasing the said rebate to 20% per annum
which
was
done
in
the
customers
interest.
However, it may be clarified that such revision was
applicable only in cases where the allottee was yet
to pay the instalments falling due for payment
AFTER April 1996.
only
in
April,
This revision came into effect
1996
and
did
not
have
any
retrospective effect.
In the present case, the Applicants had already
finished paying their instalments in November,
1995
and
hence
clearly
not
entitled
to
the
60
subsequent rate of interest which came in effect
only in April 1996. It is denied that the Applicants
were entitled to enhanced rate of interest or were
deprived of the benefit of this enhancement in the
rate of interest or at all. The revision in the rate of
interest was company’s policy, which came into
effect from 1.4.96 which means that instalment
paid before the scheduled are of payment after April
1996 were entitled to the
rebate equivalent to
interest at the rate of 20% per annum as against
the earlier 18% per annum.
It is further denied that the Respondent Company
is under any obligation to pay interest to the
Applicants for any delay in handing over possession
of the Apartment.
It is specifically set out in
Clauses
of
16
&
18
the
Apartment
Buyer’s
Agreement (reproduced herein below) that the
Respondent’s proposed to deliver possession of the
Apartment in 2-1/2-3 to 3 years, even though the
Respondent shall not incur any LIABILITY if it is
unable to deliver possession of the said premises by
the aforementioned time. In terms of Clause 18, in
the case of delay in delivery of the possession, the
allottee shall have the liberty to give notice to the
Respondent terminating the agreement and the
allottee would be entitled to the refund of earnest
61
money and all other further amounts received by
the Respondents, it is further provided in Clause 18
that neither party shall have any other claim
against the other in respect of the said premises.
The averments made in this para are clearly
misconceived.
The Applicant is trying to mislead
the Hon’ble Commission by bringing in something
which is beyond
the scope of the contract/
Agreement.
It is further denied that the Respondent is liable to
pay any compensation to the Applicants. As stated
earlier the Applicants have only the right to give
notice of termination of the Agreement to the
Respondent as enumerated in Clause 18.
The
Applicant is not entitled to any compensation
whatsoever.”
13.
The complainants filed rejoinder and reiterated the stand taken in
the main complaint.
Paragraphs 2, 3 and 4 of the rejoinder are
reproduced below:“2.
That it will be evident from a perusal of the present
Reply filed by the Respondent that the case of the
Respondent is that the inordinate and inexplicable delay
in handing over the possession of the Apartment in
question to the Applicants was in accordance with the
terms of the Agreement entered into between the parties
62
and that the period of two and a half to three years which
had been agreed to between the parties in terms of Clause
16 the said Agreement was merely a proposed time period
for the said purpose.
The Respondent had further
averred that in the event of the Respondent failing to
adhere to the abovesaid time stipulation expressly agreed
to between the parties, the Respondent was not to be held
liable for the delay.
This
stand
of
the
respondent
is
grossly
misconceived and untenable. It is reiterated that the very
act of the Respondent Company in neither handing over
the possession of the apartment in question nor paying
any interest to the Applicants on the entire sale
consideration of approximately Rs. 21 lakhs – paid by the
Applicants as far back as December 1995, is per se unfair
and is liable to be declared as such and corrected by
appropriate orders by this Hon’ble Commission.
It is
reiterated that the very tenor of the said agreement will
make it abundantly clear that time is the essence of the
contract and the Applicants ought not to be penalised for
any delay on the part of the Respondents to handover the
possession of the Apartment in question and which delay
is solely attributable to the Respondent Company.
It may not be out of place to mention herein that
the two-and-half year time stipulation for the handing
over of the possession of the Apartment in question was
binding upon the Respondent would also be evident by
63
the fact that the payment plan in respect of the said
Apartment was co-terminus with the said period, both
ending November 1995.
It may further be noted that
even as the Respondent came towards the end of the
Instalments, they surely knew there would be a delaying
handing over of the possession.
The Respondent,
however and with ulterior motives, at no stage informed
the Applicants of the said delay during the subsistence of
the payment plan. It is reiterated that the said delay is
wholly attributable to the Respondent and is an Unfair
Trade Practice, liable to be so declared by this Hon’ble
Commission and the applicants are accordingly liable to
be compensated for the same by passing of appropriate
orders by this Hon’ble Commission.
3.
That it is submitted that the failure of the
Respondent to handover the possession of the said
apartment to the Applicants is wholly arbitrary and illegal
apart from being in gross violation of the terms of the
agreement entered into between the parties.
The
Applicants submit that the said delay of more than 2
years on the part of the Respondent Company to hand
over the possession of the Apartment is wholly attributed
to the acts and omissions of the Respondent and for
which the Applicants ought not to be allowed to suffer.
The said delay is wholly unexplained in the present Reply
filed on behalf of the Respondent.
The Applicants
reiterate that on account of the inordinate delay of the
64
Respondent in handing over of the possession of the
Apartment in question to the Applicants, the entire sale
consideration, amounting to Rs. 20.803 lakhs, which has
already been paid by the Applicants way back in
November, 1995, is lying un-utilised and the Applicants
are being deprived of gainfully putting the same to
alternative use.
In addition thereto the Respondent Company is not
paying any interest on the said amount and there is no
likelihood of the possession being handed over in the near
future as the said apartment project in question is still
under construction.
Significantly, the Respondent also in its circular /
letter dated 21.4.1997, admits that the construction of
the apartment in question is yet to be completed.
The
Respondent Company has, in fact, communicated to the
Applicants, vide letter dated 21.4.1997 that they propose
to hand over possession of the Apartment in March 1998
subject to their obtaining Government Approval.
Applicants
submit
that
the
trade
practices
The
being
employed by the Respondent Company are grossly unfair
apart from being prejudicial to the interest of the
consumers and the public at large.
The Application
under section 36A of the MRTP Act is accordingly, liable
to be allowed in terms of the prayers made therein.
4.
That the contention of the Respondent that in view
of the said delay attributable solely to the Respondent,
65
the Applicants ought to have terminated the said
Agreement in terms of clause 18 thereof, is wholly
misconceived and untenable. The Applicants submit that
in the event of the Applicants terminating the said
Agreement, the Applicants would be entitled to the refund
of the only the principal amount, i.e. the actual sale
consideration paid by the Applicants to the Respondent
and not any interest accrued thereon for a period of more
than two and a half years and which is clearly unfair and
grossly harmful to the interests of the Applicants and the
consumers is general.
It is submitted that the Respondent Company
knowing fully that the prices of the property in question
have greatly appreciated during the period of the delay on
part
of
the
Respondent
Company
is
seeking
to
unjustifiably advantage itself by referring to clause 18 of
the Agreement whereby in cases of delay in handing over
possession the apartment buyer is free to terminate the
agreement and in which case the apartment buyer shall
be liable to get a refund of only the principle amount
without any interest whatsoever. The Applicants submit
that the Respondent ought not to be allowed to, on the
one hand treat the sake consideration of approximately
Rs. 21 lakhs as an interest free loan and then on the
other hand after being unable to handover the possession
of the apartment to the Applicants within time, seem, to
66
repudiate the contract and unjustly enrich itself by the
appreciation in prices of the property in question.
It will be evident that the defence, if any, sought to
be raised by the Respondent is a sham and a moon shine
defence and the same is liable to be rejected forthwith by
this Hon’ble Commission.”
14.
By an order dated 01.08.1997, the Monopolies and Restrictive Trade
Practices Commission (for short, ‘the Commission’) ordered notice on the
complaint as also the application filed under Section 12-A of the Act. On
the next date i.e., 14.08.1997, learned counsel for the respondent gave an
undertaking that his client will not cancel the allotment of the
apartment.On 19.01.1998, learned counsel for the parties gave out that
there is a possibility of compromise and sought adjournment on the
issuance of Notice of Enquiry. However, no compromise could be reached
between the parties and after taking cognisance of the statement made by
the learned counsel for the respondent in that regard, the Commission
ordered Notice of Enquiry.
15.
By an order dated 25.09.1998 passed in other similar complaints,
the Commission disposed of the applications filed under Section 12-A of
the Act and directed the respondent not to cancel the apartment allotted
to the complainants. The Commission also directed delivery of possession
to the apartment buyers on certain conditions. Similar order was passed
in favour of the complainants on 12.11.1998.
The application filed for
clarification of the interim order was disposed of by the Commission vide
order dated 24.12.1998, the relevant portions of which are extracted
below:-
67
“1.
Since we have stated that the extra charges are
subject to the outcome of the enquiry, the extra
charges demanded have not been stayed. Thus if
any complainant wants complete possession of the
flat with transfer of ownership he has to pay the
extra charges in full. In other cases, if the
complaints are ultimately dismissed or the extra
charges are revised by the Commission the interest
chargeable on extra charges not paid will be from
the dates on which they become originally due as
extra charges have not been stayed. However, as
per Direction 4 the respondent is restrained from
cancelling the flats until the conclusion of the
enquiry and therefore if a complainant decides not
avail of the dispensation contained in Direction
no.2 and chooses not to pay the extra charges
pending this enquiry the flat/commercial space
cannot be cancelled. Such a complainant is
however subject to Direction no.3.
2.
The purport of the Direction no. 2 is that while he is
protected
against
cancellation
of
the
flat/commercial space, if any complainant pays 75
per cent of the extra charges within a period of
three months from the date of the order he should
be treated as if he has paid the full extra charges
subject to Direction no.3. In view of this the
68
respondent shall hand over conditional possession
of the flat/ commercial space as soon as they are
ready for occupation or for carrying out interim
decoration or depending on whether the flat/
commercial space is ready for handing over for
interior decoration or for occupation in normal
circumstances. Since the quantum of extra charges
payable will be determined at the conclusion of the
enquiry for final adjustment, we have already
clarified that if the dispensation contained in
Direction No.2 is availed of the respondent need not
transfer ownership of the flat until the conclusion of
the
enquiry
and
any
possession
given
for
occupation/interior decoration is thus conditional.”
16.
The respondent challenged the interim orders of the Commission
byfiling Civil Appeals Nos. 6502 – 6520 of 1999 in the Supreme Court and
also applied for stay. The Supreme Court entertained the respondent’s
prayer and passed an interim order dated 18.01.1999, which reads as
under :
“Respondent No. 1 appears and applies for time to
obtain instructions. Application granted.
Issue notice returnable in 8 weeks. In the meantime
interim
stay
on
condition
that
those
who
have
deposited/paid 75% of the extra charges as demanded by
the appellant within 3 months. Such complainants will
69
deposit balance amount of 25% in this Court with the
Registrar.
On deposit of such amount such persons
would be entitled to get the possession. Deposit of 25%
in this Court will be subject to order that will be passed
by this court. It is also made clear that the possession
will be given to such complainants would be pursuant to
the clarificatory order passed by M.R.T.P. Commission.”
17.
The appeals filed by the respondent were finally disposed of by the
Supreme Court vide order dated 19.02.2004, which is reproduced below:
“This appeal arises from an interim order passed by
the Monopolies & Restrictive Trade Practices Commission
dated September 25, 1998.
Broadly speaking, the
dispute relates to the entitlement of the appellant to
charge enhanced costs in respect of allotted flats. This
Court had, by an order dated January 18, 1999, granted
interim stay on the condition that those who have
deposited/paid 75% of the extra charges as demanded by
the appellant within three months such complainants will
deposit balance amount of 25% in this Court with the
Registrar.
On deposit of such amount, such persons
would be entitled to get the possession. By a subsequent
orderdated August 9, 1999, this Court directed that “the
various amounts deposited by the complainants in this
Court with the Registrar be invested in a fixed deposit
with any nationalised bank for a period of one year and
70
shall be renewed thereafter if the appeals are not heard.”
While there appears to have been some orders relating to
the
withdrawal
of
the
amount
deposited
by
the
respondent on January 8, 2001 and August 14, 2003, the
parties have now agreed that the appellant may withdraw
the
amount
without
prejudice
to
the
rights
and
contentions of either party before the Monopolies &
Restrictive
Trade
Practices
Commission.
Ordered
accordingly.
The Civil Appeals are disposed of.”
18.
In furtherance of the orders passed by the Supreme Court, the
complainants paid the balance price and possession of the apartment was
delivered to them.
19.
In the meanwhile, the Commission passed an order dated
01.04.1999 and framed the following issues:“1.
Whether the respondent has been indulging in unfair
trade practices as alleged in the Notice of Enquiry?
2.
Whether the alleged unfair trade practices are prejudicial
to the interest of the consumer/consumers generally?”
20.
From
02.07.1999
to
12.09.2007,
the
parties
conducted
admission/denial of the documents and produced their respective
evidence.
Complainant No. 2 Shri Kunal Verma filed affidavit dated
30.08.2000 by way of evidence along with documents marked Exhibits C1 to Exhibit C-13.
He was cross-examined by the counsel for the
respondent.The respondent filed evidence in the form of the affidavits of
71
Shri Raj Kumar Singhal (Senior Manager, Planning), who also filed three
documents marked Annexures –A, B, and C, Shri Anil Gupta (Chief
Architect), who filed documents marked Annexures – A to I and Shri
K.Swaroop
(Vice-President,
Annexures – A to L.
Legal),
who
filed
documents
marked
They were cross-examined by the counsel for the
complainants as RW- 1, RW- 2 and RW-3.
21.
After completionof the evidence, the case was listed for final
arguments, but was adjourned from time to time at the request of the
learned counsel for the parties.
22.
The Monopolies and Restrictive Trade Practices Act, 1969 was
repealed by Section 66 of the Competition Act 2002, as substituted by Act
39 of 2007 and all matters pending before the erstwhile Monopolies and
Restrictive Trade Practices Commission stood transferred to the Tribunal.
Even thereafter, the case was adjourned at the request of the parties and
even otherwise.
23.
On 07.08.2012, learned counsel for the parties brought to the
notice of the Tribunal that order dated 04.02.2010 passed in UTPE
No.206 of 1998 covering issues similar to those raised by the
complainants has been challenged before the Supreme Court and the
matter is pending in that court. Thereupon, the Tribunal adjourned the
case sine-die.
24.
In February 2014, the matter was again listed before the Tribunal
but was adjourned on the ground of pendency of matter before the
Supreme Court. On 21.04.2015, no one appeared for the complainants.
However, instead of dismissing the complaint in default, the Tribunal
72
adjourned the matter.
On the next date i.e. 20.05.2015 also, none
appeared for the complainants. Therefore, the complaint was dismissed
in default albeit by a detailed order.
25.
R.A. No. 03 of 2015 filed on behalf of the complainants for
restoration of the matter was dismissed on 26.10.2015 because affidavit
finding support thereof was found to be defective.The second restoration
application filed on behalf of the complainants, which came to be
registered as R.A.No. 8/2015 was dismissed because no-one appeared for
the
complainants.However,
the
third
restoration
application
(R.A.
No.09/2015) was allowed and the case was restored to its original
number.
26.
Shri Vishwajit Singh, learned counsel for the complainants referred
to the advertisements issued by the respondent to emphasise it had made
unequivocal promise to the prospective buyers to hand overpossession of
the apartment at the end of two years and six months and submitted that
the complainants and other similarly situated persons were misled to
book the apartments by paying huge amount as earnest money and
instalments of price but neither the construction was completed within
the stipulated period nor possession was given in accordance with the
promise. Learned counsel submitted that the misrepresentation made by
the respondent about the time within which possession of the apartment
was to be delivered to the complainants had prompted them to submit
application for allotment of Apartment No. 1201 A and deposit the
instalments of price else they may have opted for an apartment being
constructed by other builder. He argued that the Tribunal should return
an affirmative finding on the issue of unfair trade practices committed by
73
the respondent because it had issued misleading advertisements inviting
the public to book apartments at DLF Beverly Park by holding out a
promise that possession of the apartment will be delivered at the end of
2years and six months to those who may opt for 2½ -year plan but
possession was given only in 1999 i.e. after six years of booking the
apartment and that too in furtherance of the orders passed by the
Commission and the Supreme Court. Learned counselthen argued that
the reasons spelt out in letter dated 21.04.1997 for not completing the
construction are wholly irrelevant and extraneous and the same cannot
justify three years’ delay in handing over of the possession.
Learned
counsel argued that even if the conditions stipulated in the application
form are treated as part of the advertisements issued by the respondent,
the respondent cannot rely upon the same as a licence for grant of three
years additional time for handing over possession of the apartment
despite receipt of full price.
Learned counsel then argued that the
justification offered by the respondent for additional cost/extra charges of
Rs. 8,87,825/- is illusory because it had already charged for external
electrification and fire-fighting measures.
Another argument made by
Shri Shri Vishwajit Singhis that the alterations/improvements made by
the respondent in the design of the apartments did not require sanction
from the competent authority and the same could not be cited as a
ground for not giving possession of the apartment to the complainants
and other buyers. He further submitted that there was no need of the
third lift in the building because two lifts were already in place and were
sufficient for the building comprising 14 apartments.
Learned counsel
extensively referred to the affidavits and cross-examination of R.W. 1 -
74
R.W. 3 to substantiate the complainants’ case that the respondent is
guilty of unfair trade practice as defined under Section 36-A of the Act.
27.
Shri Ravinder Narain, learned counsel for the respondent argued
that no promise was held out to the prospective buyers that possession of
the apartments booked by them will necessarily be delivered at the end of
the particular period. He submitted that in view of the note contained in
the advertisements, the terms and conditions contained in the application
form will have to be read as part of the advertisement and if that is done,
it cannot be said that the respondent had made any misrepresentation to
the prospective buyers about the time of delivery of the possession.
Learned counsel read out various clauses of the terms and condition
embodied in the application form and Apartment Buyer’s Agreement to
show that the respondent had merely indicated probable time within
which the possession of the apartments would be given to the
complainants and argued that those who did not want to wait beyond the
specified period had the option to seek cancellation of booking and refund
of the amount deposited by them.
In support of this submission, Shri
Ravinder Narain relied upon Clause 18 of the Apartment Buyer’s
Agreement. He further argued that Section 36-A cannot be invoked by
the complainants because the advertisements issued by it were not for
promotion of sale of the apartments or for the provision of any services.
In support of his arguments, Shri Ravinder Narain relied upon the
judgement of the Supreme Court in Rajasthan Housing Board Vs. Parvati
Devi
(Smt.)
and
others
–
[(2000)
6
SCC
104],
Man
Roland
Druckimachinen AG Vs. Multicolour Offset Ltd. and another – [(2004) 7
SCC 447], Prashant Kumar Shahi Vs. Ghaziabad Development Authority
75
– [(2000) 4 SCC 120], Bharathi Knitting Company Vs. DHL Worldwide
Express Courier Division of Airfreight Ltd.–[(1996) 4 SCC 704], Bangalore
Development Authority Vs. Syndicate Bank – [(2007) 6 SCC 711] and the
order of the Commission in RTPE 36 of 1999 B.B. Patel and three others
Vs. DLF Universal Limited decided on 19.01.2009 and argued that in the
absence of any unequivocal promise to hand over possession within a
particular time, mere delay in that regard cannot constitute an unfair
trade practice as defined in Section 36-A of the Act.
28.
We have considered the respective arguments and carefully scanned
the record. For deciding whether the respondent is guilty of unfair trade
practice and whether the complainants are entitled to interest @ 24% on
the amount deposited by them, it will be useful to notice the definitions of
the term ‘trade’ and ‘trade practice’ contained in Section 2(s) and 2(u) as
also Sections 36-A, 36-B and 36-D. The same read as under :
“Sec. 2 Definitions. -In this Act, unless the context
otherwise requires,(s)
“trade” means any trade, business, industry,
profession
or
occupation
relating
to
the
production, supply, distribution or control of
goods and includes the provisions of any
services.
(u)
“trade practice” means any practice relating to
the carrying on of any trade, and includes –
(i)
anything done by any person which
controls or affects the price charged by,
76
or the method of trading of, any trader or
any class of traders,
(ii)
a single or isolated action of any person
in relation to any trade.”
“Sec. 36A. Definition of unfair trade practice.— In this
Part, unless the context otherwise requires, "unfair trade
practice" means a trade practice which, for the purpose of
promoting the sale, use or supply of any goods or the
provisions of any services, [adopts any unfair method or
unfair or deceptive practice including any of the following
practices], namely:
(1)
The practice of making any statement, whether
orally or in writing or by visible representation which,-(i)
falsely represents that the goods are of a
particular standard, quality, [quantity], grade,
composition, style or model;
(ii)
falsely represents that the services are of a
particular standard, quality or grade;
(iii)
falsely represents any re-built, second-hand,
renovated, re-conditioned or old goods as new
goods;
(iv)
represents that the goods or services have
sponsorship,
approval,
performance,
characteristics, accessories, uses or benefits
which such goods or services do not have;
77
(v)
represents that the seller or the supplier has
a sponsorship or approval or affiliation which
such seller or supplier does not have;
(vi)
makes a false or misleading representation
concerning the need for, or the usefulness of,
any goods or services;
(vii)
gives to the public any warranty or guarantee
of the performance, efficacy or length of life of
a product or of any goods that is not based on
an adequate or proper test thereof :
Provided that where a defence is raised to the effect that
such warranty or guarantee is based on adequate or
proper test, the burden of proof of such defence shall lie
on the person raising such defence;
(viii) makes to the public a representation in a
form that purports to be-(i)
a warranty or guarantee of a product or
of any goods or services; or
(ii)
a promise to replace, maintain or repair
an article or any part thereof or to
repeat or continue a service until it has
achieved a specified result.
if such purported warranty or guarantee or promise is
materially misleading or if there is no reasonable prospect
that such warranty, guarantee or promise will be carried
out;
78
(ix)
materially misleads the public concerning the
price at which a product or like products or
goods
or
services,
have
been,
or
are,
ordinarily sold or provided, and, for this
purpose, a representation as to price shall be
deemed to refer to the price at which the
product or goods or services has or have been
sold by sellers or provided by suppliers
generally in the relevant market unless it is
clearly specified to be the price at which the
product has been sold or services have been
provided by the person by whom or on whose
behalf the representation is made;
(x)
give false or misleading facts disparaging the
goods, services or trade of another person.
Explanation : For the purposes of clause (1), a statement
that is(a)
expressed on an article offered or displayed
for sale, or on its wrapper or container; or
(b)
expressed on anything attached to, inserted
in, or accompanying, an article offered or
displayed for sale, or on anything on which
the article is mounted for display or sale; or
(c)
contained in or on anything that is sold, sent,
delivered, transmitted or in any other manner
whatsoever made available to a member of the
public,
79
shall be deemed to a statement made to the public by,
and only by, the person who had caused the statement to
be so expressed, made or contained;
(2) permits the publication of any advertisement
whether in any newspaper or otherwise, for the sale or
supply at a bargain price, of goods or services that are
not intended to be offered for sale or supply at the
bargain price, or for a period that is, and in quantities
that are, reasonable, having regard to the nature of the
market in which the business is carried on, the nature
and size of business, and the nature of the advertisement.
Explanation.—For the purpose of C1. (2) “bargain
price” means—
(a)
a price that is stated in any advertisement to
be a bargain price, by reference to an ordinary
price or otherwise, or
(b)
a price that a person who reads, hears, or
sees the advertisement, would reasonably
understand to be a bargain price having
regard to the prices at which the product
advertised or like products are ordinarily sold.
(3) permits –
(a)
the offering of gifts, prizes or other items with
the intention of not providing them as offered
or creating the impression that something is
being given or offered free of charge when it is
80
fully or partly covered by the amount charged
in the transaction as a whole;
(b)
the conduct of any contest, lottery, game of
chance or skill, for the purpose of promoting,
directly or indirectly, the sale, use or supply
of any product or any business interest.
(4) permits the sale or supply of goods, intended to
be used, or are of a kind likely to be used, by consumers,
knowing or having reason to believe that the goods do not
comply with the standards prescribed by competent
authority relating to performance, composition, contents,
design, constructions, finishing or packaging as are
necessary to prevent or reduce the risk of injury to the
person using the goods.
(5) permits the hoarding or destruction of goods, or
refuses to sell the goods or to make them available for
sale, or to provide any service, if such hoarding or
destruction or refusal raises or tends to raise or is
intended to raise, the cost of those or other similar goods
or services.”
“Sec. 36-B. Inquiry into unfair trade practices by
Commission.—The Commission may inquire into any
unfair trade practice,—
(a)
upon
receiving
constitutes
a
such
complaint
practice
of
from
facts
which
any
trade
association or from any consumer or a registered
81
consumers’ association, whether such consumer is
a member of that consumers’ association or not; or
(b)
upon a reference made to it by the Central
Government or a State Government; or
(c)
upon an application made to it by the Director
General; or
(d)
upon its own knowledge or information.”
“Sec. 36D. —Powers which may be exercised by the
Commission inquiring into an unfair trade practice.- (1)
The Commission may inquire into any unfair trade
practice which may come before it for inquiry and, if after
such inquiry, it is of opinion that the practice is
prejudicial to the public interest, or to the interest of any
consumer or consumers generally, it may, by order direct
that –
(a)
the practice shall be discontinued or shall not be
repeated;
(b)
any agreement relating to such unfair trade practice
shall be void or shall stand modified in respect
thereof in such manner as may be specified in the
order;
(c)
any
information,
statement
or
advertisement
relating to such unfair trade practice shall be
82
disclosed, issued or published, as the case may be,
in such manner as may be specified in the order.
(2) The Commission may, instead of making any
order under this section, permit any party to carry on any
trade practice, if it so applies and takes such steps within
the time specified by the Commission as may be
necessary to ensure that the trade practice is no longer
prejudicial to the public interest or to the interest of any
consumer or consumers generally, and, in any such case,
if the Commission is satisfied that necessary steps have
been taken within the time so specified, it may decide not
to make any order under this section in respect of that
trade practice.
(3) No order shallbe made under sub-section (1) in
respect
of
any
trade
practice
which
is
expressly
authorised by any law for the time being in force.”
29.
The term “trade practice” comprises of two parts.
It means any
particular practice, carrying on of any trade, and includes anything done
by any person which controls or affects the price charged by, or the
method of trading of, any trader or any class of traders, a single or
isolated action of any person in relation to any trade. The term ‘restrictive
trade practice’ was analysed by the Supreme Court in Tata Engg.
Locomotives Co. Ltd. Vs. Registrar of the Restrictive Agreement- [(1977) 2
SCC 55] and Mahindra and Mahindra Ltd. Vs. Union of India – [(1979) 2
83
SCC 529].
In the second decision, the Court referred to the earlier
judgement and made the following observations :
“It is now settled law as a result of the
decision of this Court in the Telco case that every
trade practice which is in restraint of trade is not
necessarily
a
restrictivetrade
practice.
The
definition of restrictive trade practice given in
Section 2(o) is a pragmatic and result-oriented
definition. It defines restrictive trade practice to
mean a trade practice which has or may have the
effect
of
preventing,
distorting
or
restricting
competition in any manner and in clauses (i) and
(ii), particularises two specific instances of trade
practices which fall within the category of restrictive
trade practice. It is clear from the definition that it
is only where a trade practice has the effect, actual
or probable, of restricting, lessening or destroying
competition that it is liable to be regarded as a
restrictive trade practice. If a trade practice merely
regulates and thereby promotes competition, it
would not fall within the definition of restrictive
trade practice, even though it may be, to some
extent, in restraint of trade. Whenever, therefore, a
question arises before the Commission or the Court
as to whether a certain trade practice is restrictive
or not, it has to be decided not on any theoretical or
84
a priori reasoning, but by inquiring whether the
trade practice has or may have the effect of
preventing, distorting or restricting competition.
This inquiry obviously cannot be in vacuo but it
must depend on the existing constellation of
economic facts and circumstances relating to the
particular trade. The peculiar facts and features of
the
trade
would
be
very
much
relevant
in
determining whether a particular trade practice has
the actual or probable effect of diminishing or
preventing competition and in the absence of any
material showing these facts or features, it is
difficult to see how a decision can be reached by the
Commission that the particular trade practice is a
restrictive trade practice.
The Supreme Court further observedthat :
“It is possible that a trade practice which may
prevent
or
diminish
competition
in
a
given
constellation of economic facts and circumstances
may, in a different constellation of economic facts
and
circumstances,
be
found
to
promote
competition. It cannot be said that every restraint
imposedby a trade practice necessarily prevents,
distorts or restricts competition and is, therefore, a
restrict trade practice There may be trade practices
which are such that by their inherent nature and
85
inevitable effect they necessarily impair competition
and in case of such trade practice, it would not be
necessary
to
consider
any
other
facts
or
circumstances, for they would be per se restrictive
trade practices. Such would be the position in case
of those trade practices which of necessity produce
the prohibited effect in such an overwhelming
proportion of cases that minute inquiry in every
instance
would
be
wasteful
of
judicial
and
administrative resource.”
30.
Section 36-A opens with the words “unless the context otherwise
requires” and goes on to state that unfair trade practice means a trade
practice which for the purpose of promoting the sale, use or supply of any
goods or for the provision of any services, adopts any unfair method or
unfair or deceptive practice including the practices mentioned in clauses
(i) to (x) of sub-section (1). These include making of any statement, oral
or written or by visible representation, which falsely represents that the
goods are of a particular standard, quality, quantity, grade, composition,
style or model or falsely represents that the services are of a particular
standards, quality or grade or falsely represents any re-built, secondhand, renovated, re-conditioned or old goods as new goods or represents
that the goods or services have sponsorship, approval, performance,
characteristics, accessories, uses or benefits, which such goods or
services do not have; or represents that the seller or the supplier has a
sponsorship or approval or affiliation which such seller or supplier does
not have; or makes a misleading representation, or makes a false or
86
misleading representation concerning the need for, or the usefulness of
any goods or services.
31.
Section 36-B empowers the Commission to inquire into any unfair
trade practice.
This can be done on receipt of a complaint of facts
constituting such practice from any trade association or from any
consumer or a registered consumers’ association, whether such consumer
is a member of that consumers’ association or not or upon receipt of a
reference made by the Central or a State Government or on an application
made by the Director General or on its own knowledge or information.
Section 36-D lays down that if, after making inquiry in terms of Section
36-B, the Commission forms an opinion that the impugned practice is
prejudicial to public interest, or to the interest of any consumer or
consumers generally then it can issue any one or more of the directions
specified in Clauses (a) to (c) of sub-section (1). Section 36-D(2) and (3)
specify the circumstances in which an order contemplated by sub-section
(1) may/cannot be passed by the Commission.
32.
What needs to be emphasised that before an order can be made
under Section 36-D(1), a finding that the opposite party has indulged in
an unfair trade practice, as defined under Section 36-A(1) is sine qua non.
In Nirma Industries Ltd. Vs. Director General of Investigation &
Registration – [(1997) 5 SCC 279], the Supreme Court interpreted Section
36-A and observed :
“Oncareful analysis of unfair trade practice defined
in Section 36-A, it is quite clear that the tradepractice
which is undertaken by the company for the purpose of
promoting the sale, use or supply ofany goods or for the
87
provision of any service/services adopts one or more
following practices andthereby causes loss or adopts one
or more of the following practices and thereby causes loss
orinjury to the consumers of such goods or service
whether
by
eliminating
or
restricting
competitionor
otherwise would amount to unfair trade practice. The
above key words used in Section 36-A whiledefining the
unfair trade practices have laid emphasis on thereby
causes loss or injury to theconsumers of such goods or
services whether by eliminating or restricting competition
or otherwise.It must, therefore, follow that any such
unfair trade practice which causes loss or injury to
theconsumers
of
such
goods
or
service
either
by
eliminating or restricting competition or otherwisewould
attract the penal consequences as provided under this
Chapter. Each of the clauses employed in Section 36-A is
interwoven by use of the conjunction and would indicate
that before determining a trade practice being unfair
trade practice, the Commission has to be satisfied as to
whether the necessary ingredients contained therein are
satisfied or not. The words or otherwise in Section 36-A
assuming are of wider import and would signify not only
actual loss or injury suffered by consumers but also
would include probable or likelihood of consumers
suffering loss or injury in any form. But for that purpose
also, there has to be some cogent material before the
Commission to support a finding of unfair trade practice
88
and any inferential finding would be contrary to Section
36-A of the Act. It is necessary for the Commission to call
upon the parties to substantiate the allegations. The
burden of proof, the nature of proof and adequacy thereof
would depend upon the facts and circumstances of each
case.”
[Emphasis supplied]
In Rajasthan Housing Board Vs. Parvati Devi (supra), the Supreme
Court interpreted Section 36-A in the backdrop of challenge to
correctness of the findings recorded by the Commission that the appellant
had indulged in restrictive trade practice attracting Section 2(o)(ii) and in
unfair trade practices covered by Section 36-A(1)(i) and (vi) of the Act.
The fact of that case were that the appellant Board, which has been
established under the Rajasthan Housing Board Act, 1970 for building
houses and allotment thereof to the persons registered under various
schemes, issued a brochure for general registration, wherein certain
conditions for registration, the amount of advance which was to be
deposited by the appellant, the estimated cost of house in different
categories and houses to be constructed and the amount of instalment
money to be paid, were mentioned.
It was also stated that the Board
would try its best to make the house available within a period of four
years from the date of registration and the applicant would be entitled to
payment of interest on the amount deposited and also to refund of money
with interest if the house is not allotted within the stipulated period.The
respondent had registered herself in low income category and paid
registration fees.
In 1988, the respondent was informed about the
89
allotment of house and was asked to pay the instalments with 18%
interest. The respondent challenged the communication of the Board by
filing a complaint before the District Consumer Forum, Jodhpur, which
was subsequently withdrawn. Thereafter, she filed complaint under
Section 36-A read with Section 36-B of the Act alleging that the Board
was guilty of unfair trade practice under Section 36-A. It was pleaded
that even though the house was allotted to her, the possession thereof
had not been given till 31.03.1993 and as a result of that, she had
suffered monetary loss to the tune of Rs. 26,000/-.
The respondent
prayed that the demand of Rs. 57,000/- as costs of the house and
monthly instalment of Rs. 715/- with interest @ 14% quashed.The
Commission
rejected
maintainability of
the
objection
raised
by
the
Board
to
the
the complaint and held that it had indulged in
restrictive traded practice as defined under Section 2(o)(ii) of the Act and
directed the Board to file an affidavit that it would not repeat the same in
future.
The Supreme Court accepted the contention of the Board that the
finding recorded by the Commission on the issue of restrictive trade
practice was legally untenable and observed :
“8.
It appears that Commission has considered that the
acts
of
the
Board
would
be
covered
by
clause
(ii)particularly last portion of the said clause namely,
services in such manner as to impose on theconsumers
unjustified costs. In our view, the Commission ought to
have read the said part alongwith the main ingredient
which requires that a trade practice which has or may
90
have the effect ofpreventing, distorting or restricting
competition in any manner would be restrictive trade
practiceand in particular which inter alia, tends to bring
about manipulation of services in such manner asto
impose on the consumers unjustified costs. For this
purpose no case is made out by therespondents that the
Board has prevented or restricted competition in any
manner which affects theservices in such a manner as to
impose on consumers unjustified costs or restrictions.
Section 2(o)will not be applicable in case where a trade
practice
has
no
effect,
actual
or
probable
of
preventing,distorting or restricting competition in any
manner.
10.
In the present case, there is no allegation or
evidence to hold that the appellanthas indulged in
restrictive trade practice. In this view of the matter
learned counsel for therespondents were not in a position
to support the said finding. Hence, the direction given by
theCommission that the appellant shall discontinue
alleged restrictive trade practices and not repeatthe same
in future and shall file an affidavit in compliance within
six weeks from the date of theorder passed in both the
matters requires to be set aside.”
91
The Supreme Court then considered whether the Board could be
held guilty of unfair trade practice, referred to Section 36-A(1)(ii)and (ix)
and held:
“13. Considering the aforesaid provisions and allegations
made against the Board, it appears thatCommission was
justified in proceeding with the matter. However, with
regard to the claim made bythe respondent in each case,
the matter is still not decided by the Commission by
considering
therelevant
documents.
At the time of
deciding the said matters, the Commission is required to
go intothe terms and conditions agreed between the
parties and to find out whether the appellant hasindulged
in unfair trade practices so as to take any further action
against the Board on the basis ofthe applications filed by
the respondents in each case.
14.
For deciding such question, the Commissionhas to
find out whether a particular act can be condemned as an
unfair trade practice; whetherrepresentation contained a
false statement and was misleading and what was the
effect of such arepresentation made to the common man.
The
issue
cannot
be
resolved
by
merely
holding
thatrepresentation was made to hand over the possession
within stipulated period and the same is notcomplied
with or some lesser constructed area is given after the
construction of the building. The Commission has to find
out whether the representation, complained of, contains
92
the element of misleading the buyer and whether buyers
are misled or they are informed in advance that there is
likelihood of delay in delivering the possession of
constructed building and also increase in the cost. For
this purpose, terms and conditions of the agreement are
required to be examined by the Commission. Not only
this, the Commission is required to consider whether the
Board has adopted unfair method or deceptive practice
for the purpose of promoting the sale, use or supply of
any goods or for the provisions of any services. Unless
there is finding on this issue, appellant Board cannot be
penalized for unfair trade practice.
[Emphasis supplied]
In Prashant Kumar Shahi Vs. Ghaziabad Development Authority
(supra), the Supreme Court again considered whether the appellant, who
had not performed his part of the contract could seek a declaration that
the respondent, Ghaziabad Development Authority was guilty of unfair
trade practice as defined under Section 36-A of the Act. In that case, the
appellant had applied for the allotment of a plotmeasuring 350 sq.mtrs.
under the Scheme at "Indrapuram" and paid registration amount
ofRs.42,000/- on 28th July, 1989. A further sum of Rs.63,000/- being
the reservation amount waspaid and plot was allotted to him vide letter of
the respondent-authority dated 5thNovember, 1989. Thefirst instalment of
Rs.76,125/- was paid by him on 16thAugust, 1990. Further instalments
during1990-95
were
not
paid allegedly on the
ground that
the
respondent-authority had not made anydevelopment at the site. The
93
appellant further stated that he was made to believe that the possessionof
the plot would be handed over to him by the year 1991. Vide letter dated
28thFebruary, 1995, theappellant was informed that if the balance
amount is not paid by him by 30thNovember, 1995,interest would be
charged on the balance amount due. The appellant's contention is that in
terms ofthe aforesaid letter the interest, if any, can be charged for the
period commencing from 30thNovember, 1995 and not earlier to it. He had
already paid a total sum of Rs.5,74,993/- but therespondents were
allegedly wrongly insisting for the payment of an additional amount
ofRs.2,34,127/- before delivery of possession of the plot.
As the plot was not delivered to him, theappellant filed a complaint
under Sections 36-A, 36-B(a) and 36-D of the Act before the Commission
which wasregistered as Unfair Trade Practice Enquiry No.92/97. Notice of
enquiry was issued to the respondent who appeared before the
Commission and contended thatthe appellant himself through his letter
dated 13th December, 1996 admitted the delay in paymentsand indicated
his willingness to pay the entire amount outstanding against him with the
request notto cancel the allotment due to delayed payments. The amount
liable to be paid by the appellant wasstated to have been calculated
strictly in accordance with the terms and conditions of the brochure. The
respondents could have cancelled the allotment in terms of the
regulations containedin the brochure but it was not done to facilitate the
appellant to make the payment of the balanceamount. It was contended
that the necessary facilities of sewerage, drainage, water supply
andelectricity connections were made available to the plot-holders
including the appellant inIndrapuram Scheme. Regarding delivery of
94
possession, it was contended on behalf of therespondent-authority, that
in the brochure only estimated time of completion of scheme and delay in
completion had occurred due to various factors including the constraints
offunds. It was further pleaded that the paucity of financial resources had
been caused due to delay ordefault in payment by the allottees like the
appellant.
On the basis of the pleadings of the parties, theCommission framed
the following issues:
"1.
Whether the respondent has been indulging in unfairtrade
practices as alleged in the NOE?
2.
Whether these unfair trade practices are prejudicial to the
interest of the complainant/ othermembers of the public?
3.
Whether he is entitled to relief/compensation claimed made
by him in the compensationapplication?
4.
Relief, if any?"
After referring to the pleadings and the evidence produced, the
Commission concluded:
"It transpires that the applicant/complainant has of
his own accord, approached the respondent andindicated
his willingness to pay the amount due from him. Not only
has he shown his desire to clearthe dues, he has also
acknowledged that there has been delay on his part in
making the payment.Perusal of the allotment letter
reveals that there is a stipulation with regard to payment
of interestand penal interest if the payment is not made
95
within
the
prescribed
time
limit.
As
both
theapplicant/complainant as well as the respondent are
relying on the allotment letter, it stands toreason that the
outstanding
amount
including
interest
should
be
calculated in the light of this letterof 5.11.1989. It
appears from the affidavit of evidence filed on behalf of
the respondent that thecalculations have been made on
the
basis
of
that
accordingly,indicated
letter
and
the
the
respondent
amount
to
has
the
applicant/complainant. In that view of the matter,
theapplicant/complainant's
contention
that
interest
should be charged after 30thMay, 1995 is nottenable. It is
also quite apparent that there has been delay in the
completion of the project but delayseems to have been
caused by circumstances beyond the control of the
respondent. It is alsocommon knowledge that there has
been cost escalation and cost estimates of 1989 need
revision andthe revised estimate is bound to be much
higher
than
the
thatdevelopment
of
original
estimate.
infrastructure
and
It
appears
provision
of
utilities like water supply and electricity connectionhave
also contributed to the hike in the estimated cost and
demand for additional charges forsewerage, lease rent,
etc., cannot be construed or considered to be an unfair
trade practice on thepart of the respondent. It also
transpires that the respondent is charged with the
responsibility
ofdeveloping
land
for
plots/flats
and
96
making
the
same
available
to
the
allottees
like
theapplicant/complainant on actual cost value basis and
the total cost incurred by it is required to berecovered
from the allottees. In that view of the matter, there is no
escape from the conclusion thatno case of unfair trade
practices by and on behalf of the respondent has been
made out and noprejudice seems to have been caused to
the applicant/complainant as a consequence thereof."
While approving the finding recorded by the Commission that the
respondent was not guilty of unfair trade practice, the Supreme Court
observed :
“Having failed to perform his part of the contract, the
appellant cannot be permittedto urge that he is not liable
to pay the balance amount along with interest as
according to him therespondent-authority had failed to
deliver possession as per terms of the brochure.The
Authoritywas not expected to deliver possession in the
absence of the payment of the agreed amount.”
In Man Roland Druckimachinen AG Vs. Multicolour Offset Ltd.
(supra), the Supreme Court interpreted Sections 36-A and 36-B in
conjunction with the provisions of Sections 23 and 28 of the Contract Act,
1872. The facts of that case were that the appellant, who carries on the
business of manufacturing printing machines in Germany entered into an
agreement with Respondent No. 1 for sale thereof.
The machine
wasshipped by the appellant from Germany to Mumbai on 16.06.1994. It
97
was offloaded at Mumbaion 05.08.1994 and cleared by the Respondent
No.1 from the customs warehouse on 22.04.1997.In November, 1997
Respondent
1 filed
two
applications
before
the
Commission
viz.
UnfairTrade Practices Enquiry (UTPE) No. 388 of 1997 in effect
complaining of unfair trade practices bythe appellant and the Respondent
No.2
relating
to
the
supply
of
the
printing
machine.
CompensationApplication (CA) No. 383 of 1997 was filed claiming over Rs.
13 crores towards the cost of themachine, customs duty paid by
Respondent No.1 on the machine interest on the cost and customsduty
and damages. However, UTPE No. 388 of 1997 was withdrawn in August
1999.
The appellant objected to the jurisdiction of the Commission on the
ground that Germany and not law of India will cover the dispute between
the parties. Another objection taken by the appellant was that it had not
provided any service nor carried on any trade or trade practice in India so
as to entitle Respondent No. 1 to invoke provisions of the Act.
The
Commission rejected both the contentions and held that clause regarding
choice of forum was contrary to Sections 23 and 28 of the Contract Act
and was void.
The Supreme Court reversed the findings of the
Commission on both the issues. After noticing Section 36-A of the Act,
the Supreme Court observed :
“In the case of an unfair trade practice as invoked by the
respondent No. 1 the object of inquiry is astatement
which is a false representation of the kind specified in
clauses (i),(ii) or (iii) of sub-section(1) of Section 36A or is
an advertisement of the kind specified in clauses (vii )or
98
(viii) thereof. Thestatement or advertisement is the trade
practice.The further requirement under the section is
thatthe trade practice complained of must be for the
purpose of promoting the sale, use or supply ofgoods or
for promoting the provision of any service. The sale, use
or supply need not, for thepurposes of the section,
actually have taken place although it may be relied upon
by
the
complainantto
establish
the
falsity
of
the
representation.”
In Bharathi Knitting Company Vs. DHL Worldwide Express Courier
Division of Airfreight Ltd. (supra), the Supreme Court considered the
definition of the term ‘deficiency in service’ used in Section 2(1)(g) of the
Consumer Protection Act, 1986 in the backdrop of the appellant’s
challenge to an order passed by the National Consumer Disputes
Redressal Commission that the agreement entered into between the
parties was binding and in terms thereof, liability of the respondent was
only to the extent of US$ 100. While dismissing the appeal, the Supreme
Court made certain significant observations, which are reproduced below
:
“6.
It is true that the limit of damages would depend
upon the terms of the contract and facts in each case. In
Anson's Laws of Contract, 24thEdn. at page 152, on
exemption clause with regard to notice of a printed
clause, it was stated that a person who signed, a
document containing contract and terms is normally
bound by them even though he has not read them, and
99
even though he is ignorant of their precise legal effect.
But if the document is not signed, being merely delivered
to him, then the question arises: whether the terms of the
contract were adequately brought to his notice? The
terms of the contract have elaborately been considered
and decided. The details thereof are not necessary for us
to Pursue. It is seen that when a person signs a
document which contains certain contractual terms, as
rightly pointed out by Mr. R.F. Nariman, learned senior
counsel, that normally parties are bound by such
contracts it is for the party to establish exception in a
suit. When a party to the contract disputes the binding
nature of the signed document, it is for him to prove the
terms in the contract or circumstances in which he came
to sign the documents need to be established. The
question we need to consider is: whether the District
Forum
or
the
State
Commission
or
the
rational
Commission could go behind the terms of the contract? it
is true, as contended by Mr. M.N. Krishnamani, that in
an appropriate case, the Tribunal without trenching upon
acute disputed question of facts may decide the validity of
the terms of the contract based upon the fact situation
and may grant remedy. But each case depends upon fits
own facts. In an appropriate case where there is an acute
dispute of facts necessarily the tribunal has to refer the
parties to original civil Court established under the CPC
or appropriate State law to have the claims decided
100
between the parties. But when there is a specific term in
the contract, the parties are bound by the terms in the
contract. The National Commission in the impugned
order pointed out as under:
"We have considered the submissions of the
counsel for the parties on the facts of the case and
having
regard
Commission.
the
The
earlier
decisions
consignment
of
containing
this
the
documents sent in the cover had been accepted by
the Appellant and was subject to the terms and
conditions mentioned on the consignment note. The
Complaining the documents sent in the cover had
been accepted by the Appellant and was subject to
the
terms
and
conditions
mentioned
on
the
consignment note. The Complainant had signed the
said note at the time of entrusting the consignment
and had agreed to and accepted the terms and
conditions mentioned therein. Clauses 5 and 7 of
the terms and conditions as also the important
notice mentioned on the consignment note are
reproduced below:
6. Limitation of liability: Without prejudice to
clause 7 the liability of DHL for any loss or
damage to the shipment, which term shall
include all documents or parcels consigned to
DHL under this Air bill and shall not mean
101
any one document or envelope included in the
shipment is limited to the lesser of
a) US $ 100
b) The amount of loss or damage to a
document or parcel actually sustained or
c) The actual value of the document or
parcel as determined under Section 6 hereof,
without regard to the commercial utility or
special value to the shipper.
7.
Consequent damages excluded. - DHL
shall not be liable in any event for any
consequential or special damages or other
indirect loss however arising whether or not
DHL had knowledge that such damage might
be incurred including but not limited to loss
of income, profits interest, utility or loss of
market.
Important Notice. -By the conditions set out
below DHL and its servants and agents are
firstly not to be liable at all for certain losses
and damages and secondly wherever they are
to be liable the amount of liability strictly
limited to the amount stated in condition and
customers are therefore advised to purchase
insurance cover to ensure that their interests
are fully protected in all event.
102
Under clause 5 of the terms and conditions of
the contract, the liability of the appellant for
any loss or damage to the consignment was
limited to US $ 100. Clause 7 of the contract
specifically provided that the liability of the
appellant for any consequential or special
damages or any other indirect loss, that may
occur including the loss of market or profits
etc. was excluded. It is also pertinent to note
that despite the advice in the important
notice, the Complainant did not did one at the
time or Consignment the contents of the cover
and also not purchased the insurance cover
to
ensure
that
their
interests
are
fully
protected in all events."
7.
In view of the above consideration and findings we
are of the opinion that the National Commission was right
in limiting the liability undertaken in the contract entered
into by the parties and in awarding the amount for
deficiency service to the extent of the liability undertaken
by the respondent. Therefore, we do not think that there
is any illegality in the order passed by the Commission.”
[Emphasis supplied]
In Bangalore Development Authority Vs. Syndicate Bank (supra),
the Supreme Court considered whether the delay in delivery of possession
of the flat/houses can construe ‘deficiency in service’ within the meaning
103
of Section 2(i) of the Consumer Protection Act, 1986. The facts of that
case show that the appellant had delayed delivery of HIG houses to the
respondent. In the consumer complaint filed by the latter, prayers were
made for directing the appellant to deliver the possession of 11 HIG
houses, for payment of interest on the amount already deposited and
future interest @19.5% per annum and Rs. 33,000/- per month by way of
reimbursement of the rent. During the pendency of the complaint, the
appellant delivered possession but directed payment of interest @ 18% on
the cost of 11 HIG house of which possession has not been given within
the stipulated time.
While setting aside the direction given by the
Commission for payment of interest, the Supreme Court made the
following observations :
“The Commission has neither referred to the
relevant facts nor drawn proper inferences. There isno
basis for the finding that BDA had agreed to deliver the
houses by December, 1986 or the findingthat no reason
was shown for the delay in delivery. The allotment of 15
HIG Houses identified byHouse numbers was only by
resolution
dated
16.1.1987
and
communicated
to
Respondent on27.5.1987. The payment was only on
15.5.1989. Delivery could not, therefore, obviously be by
theend of December, 1986. If reasonable period for
construction is to be reckoned as two years (asassumed
by the Commission), then the question of delay would
arise only after 15.5.1991. TheCommission also assumed
that mere delay automatically meant deficiency in service
and in all suchcases, the allottee will be entitled to
104
interest at 18% per annum from the date of payment till
date ofdelivery by relying on its decision inHUDA vs.
Darsh Kumar. The decision of the Commission inHUDA
vs. Darsh Kumar was held to be unsustainable by this
Court, on appeal in HUDA vs. DarshKumar [2005 (9) SCC
449]. This Court held that there cannot be uniform award
of interest at 18%per annum in all cases and that in
cases of complaints of deficiency in service by a
developmentauthority relating to allotment of plots/flats,
the principles laid down in Balbir Singh (Supra) shouldbe
applied. Therefore, the decision of the Commission under
appeal, based on its earlier decision inDarsh Kumar,
cannot be sustained.
As already noticed, where the grievance is one of
delay in delivery of possession, and the Development
Authority delivers the house during the pendency of the
complaint at the agreed price, and such delivery is
accepted by the allottee-complainant, the question of
awarding any interest on the price paid by him from the
date of deposit to date of delivery of possession, does not
arise. The allottee who had the benefit of appreciation of
price of the house, is not entitled to interest on the price
paid. In this case, the 11 houses were delivered in 1997
at the agreed prices (Rs. 5.5 lacs per corner HIG House
and Rs.4.75 lacs per other HIG Houses). In view of it, the
order of the Commission awarding interest at 18% per
105
annum on the price of the houses is unsustainable and
liable to be set aside.”
[Emphasis supplied]
The Supreme Court also overturned the direction given by the
Commission for payment of compensation by way of rent by observing
that no evidence had been led by the respondent on that score.
The prayers similar to those by the complainants were considered
by the Commission in RTPE 36 of 1999 - B.B. Patel and three others Vs.
DLF Universal Limited decided on 19.01.2009 and negatived. The relevant
portions of that order are extracted below :
“10. The complainants applied and made payment of
Rs.1,00,000/- each on 14th January 1993 for the
respective flats based on the representations made by
the respondents which were
published wherein it was
stated, inter-alia, that the applicants had to pay just
40% of the cost and that too within 2-1/2 years where
after they will get the possession.
The Agreement was
entered into on 23.03.1993 which was a pre-printed
document. It has been alleged that none of these terms
of
the clauses of
negotiated
or
read
the Agreement were
and
the
discussed,
signatures
of
the
complainants were obtained on the said booklet on the
basis “sign it or leave it”. In the affidavit of evidence, the
complainant has stated that the possession was to be
handed over to him within 2-1/2 years after making 40%
106
of the payment under the plan he opted and that he was
to pay the balance for the next 7-1/2 years in equated
quarterly instalments but when the possession had been
delivered. Payments for car parking were also made in
accordance with the schedule of the payment as annexed
with the Agreement. No construction had started on the
site till the beginning of 1995, yet the complainants went
on paying their instalments according to the Agreement.
The complainants had paid a sum of Rs. 19,82, 425/- till
11th April 1998 and according to the complainants entire
cost of the flat was realized by the respondent prior to
the date of offer of possession leaving a sum of Rs.
55,000/-.
The construction in this case as per the
respondents’ witness started only in June 1996 and the
Occupancy Certificate was received by the respondents
on 23.06.1998 and, therefore, the act of the respondents
in not making available the possession of the flat within
time and providing the extension of time itself according
to the various terms of Agreement tantamounted to
unfair and restrictive trade practices. The argument of
the
respondent
on
the
other
hand
is
that
the
complainant had preferred the 10 years payment plan
and in terms of Clause 17 and 21 of the Agreement the
permissive possession of the said premises was to be
handed over to them as a licencee when flats were ready
for use and occupation, provided all the amounts due/
payable by the apartment allottee were paid to the
107
respondents.
Therefore, if the building was not ready
the question of handing over possession as a licencee did
not arise. Clause- 21(d) of the Agreement also refers that
if for whatever reasons respondents were unable to
handover possession/deemed possession within the
agreed time, apartment allottee shall continue to make
payments to the company of all the agreed equated
quarterly instalments including interest @ 18% per
annum on reducing balance payment basis. Therefore,
in terms of this Clause upon handing over of possession
as a licencee, said amount shall become payable as
license fee. This was a facility provided to the customers
and there was no such fixed period of 2-1/2 years within
which they had undertaken to handover the possession
as is clear from the reading of these Clauses in the
Agreement. The permissive possession as a licencee was
offered to the complainants on 26.06.1998 subject to the
complainants completing the payment of all dues
including other charges mentioned in Clause 21(d)
including instalments till then.
Similar terms were
indicated regarding the payments for 10 years payment
plan in the application made by the complainants on
14th January 1993, wherein it was specifically agreed to
by the complainants that where the possession was not
handed over, the complainants will continue to make
payments along-with 18% interest.
Even in terms of
Clause-16 of the Agreement, which was signed by the
108
complainants, the time for possession was not fixed and
therefore, this contract was not of a nature where time
for giving possession was the essence of the contract,
since it was not specified, in terms of the judgement of
the Supreme Court in Bangalore Development Authority
Vs. Syndicate Bank (2007) 6 SCC 711.
10(2). On this point, it is seen that in the application
which was signed on 14.01.1993 there was a clear
mention about the complainants continuing to make
payment of the instalments. The Agreement was entered
into on 23.03.1993 which is immediately i.e. within two
months wherein in the preamble it was clearly stated
that the said area will be developed in accordance with
the building plan as may be approved by Director Town
and Country Planning Government of Haryana and that
the possession of the said premises was proposed to be
delivered within 2-1/2 to 3 years from the date of the
booking of the apartment.
In Clause-16 of the
Agreement, it has been clearly stated that if there was a
delay
for
certain
reasons
specified
therein,
the
respondent’s company shall be entitled to reasonable
extension of time for delivery of possession.
Under
Clause-18 of the Agreement, it has been stated that if for
some reasons company was unable to deliver possession
within the time specified in Clause-16, the apartment
allotteee shall be entitled to give notice to the company
terminating the Agreement and the respondent company
109
shall refund the money. In Clause – 21(d) again it has
been mentioned that the company shall endeavour to
handover,
to
the
apartment
allottee
permissive
possession of the premises as a licenceee on monthly
licence basis after he had made payment of 40% of the
sale price and other chargesand the allottee will be
paying the balance 60% of the sale price in 30 quarterly
instalment as specified in schedule of payment.
It
further says that the licence fee shall, however, be
payable
from
possession
of
the
date
of
possession
the
apartment.
The
or
deemed
complainants,
therefore, had entered into an Agreement immediately
after the application made by them in January 1993 and
just because the Agreement was on a pre-printed form
will not by itself imply that they had signed it
unknowingly or under coercion or on misrepresentation.
In fact some of the conditions as put in the Agreement
were also reflected in the original application form which
was signed by the complainant in January 1993.
Nowhere in the Agreement or in the advertisements
originally
floated by the company
there
was
any
commitment to handover possession of the apartment
within a fixed period of 2-1/2 to 3 years. In fact in the
Agreement in the preamble, it had been mentioned that
this will be subject to building plan to be approved by
the Director Town and Country Planning and it is not
correct on the part of the complainants to allege that this
110
fact was hidden from them.
This delay in the
construction of the apartment also cannot be considered
to be against public interest because as it has come out
in evidence, the cost of escalation beyond the agreed
time of 1-1/2 to 3 years, in this case was absorbed by
the respondents themselves and has not been passed on
to the apartment allottees. Admittedly, the complainants
went on making payments according to the schedule of
payment knowing fully well that nothing had come up on
ground till about 1995 and in terms of the Agreement
they had the liberty to revoke the contract and seek the
refund which they did not do. The entire argument on
the part of the complainants is based on the ground as if
there was a fixed time for delivery of possession in the
contract entered into between the parties which is not
the case.
Obviously, even permissive possession as
stipulated under Clause-17 could not have also been
handed over to them since the construction had got
delayed and the interpretation of Clause – 18 that it
implied a different time schedule for the complainant
does not pass the muster.
The fact remains that the
said ‘Apartment Buyers’ Agreement were signed as early
as in March 1993 immediately after the application was
made and it does not lie in the mouth of the
complainants
now
to
say
that
there
was
misrepresentation in the Clauses of that Agreement
compared to what was promised to them particularly
111
when they had gone through it, understood and signed
it.
There is nothing on record to show that the
agreement was
fraudulent
signed
by them under
representation.
Considering
duress
all
or
these
circumstances, I do not find any substance in the
allegation that this delay in execution of the project
tantamounted
to either unfair
or restrictive
trade
practices on the part of the respondents and it is held so.
Extra charges
11.
The second allegation relates to demand of extra
charges by the respondents on 02.06.1997 to the extent
of
Rs.
8,78,905.00
on
account
of
various
items
mentioned in para-2 above and they were to be paid in
four instalments.
12.
Under Clause-2(b) of the Agreement it is provided
that the allottee shall additionally pay on demand of the
respondent’s company the proportionate share of the
cost of the provisions of external electrification, fire
safety measures.
This was, therefore, over and above
the basic cost of the apartment. One of the arguments
taken by the complainants to justify their allegation is
that when the construction was not complete raising a
demand on 02.06.1997, half way through construction
period, of such extra charges was wrong and that this
tantamounted
to
manipulation
of
prices
and
unjustifiably increase the cost. It has been argued that
112
fire fighting measures were mandatory in terms of the
National Building Code of India and the external
electrification
essential
charges.
etc.
were
amenities/services
and
forming
part
therefore,
of
were
required to be borne by the respondent’s company at
their own cost. It has been alleged that Clauses 4 and
16 wherein the respondents had retained the right to
vary the area and other terms and conditions of the
Agreement were unjust and these should be struckdown as being detrimental to the interest of the of the
complainants. It was, however, argued on behalf of the
respondents that in this case, the advance intimation
had been given regarding the details of extra charges to
the complainants vide letter dated 02.06.1997. Further,
respondents in their letter dated 16.12.1997, which was
filed along-with the complaint had explained in detail
the reasons for
the increase in
cost
of
various
components. With regard to the area, it was stated that
the area at the time of sale was tentative and
approximate as indicated in the preamble of the
Agreement as well as Clause -15 of the Agreement and
the increase in the area had been necessitated by the
introduction of third lift in each tower, provision for
space for laundry facilities in the basement and
enhanced public spaces, in particular much larger
entrance lobbies in each tower.
It was also stated in
that letter that the escalation charges of material and
113
labour cost were frozen on 30th March, 1996 and any
charges beyond this date were to respondent’s account.
Referring to the decision of the Commission in Grahak
Sahayak Gurgaon & Ors. Vs. DLF Universal Ltd. & Anr.
In UTPE 258/1998 on this question, the counsel for the
respondents argued that unlike in that case here the
details
had
complainants.
been
explained
in
advance
to
the
The extra charges were payable by the
complainants in terms of the specific Clauses of the
Agreement which the complainants were fully aware at
the time of signing the Agreement. The first instalment
of these extra charges demanded was also paid by the
complainants without any protest or objection, which
shows that they were aware of the Clauses of the
Agreement and the justification for these extra charges
and in the same letter they had sought time for
extension of payment, which was agreed to by the
respondents vide their letter dated 1st September, 1997,
which is on record. Therefore, this clearly shows that
the complainants were agreeable to pay the further
instalments as per Clause -4 of the Agreement, but
these instalments were not paid, as a result the
respondents were compelled to issue letter dated
18.09.1998 demanding payment
allotment could be cancelled.
failing which the
The present complaint
was filed on 22.01.1999 because there was a similar
case pending before the Commission. Further, in terms
114
of the Agreement signed by the complainants, they
could not have stopped the payment on the ground that
the possession was not handed over under a 10 year
payment plan as discussed earlier.
13.
The evidence on record reveals the fact that the
complainants had continued making payment of the first
instalment of extra charges and that the details of these
extra charges had been explained to them much earlier.
In any case that cannot be held against the respondents
as argued by the complainants.
There is a letter on
record dated 26th
of
May,
1998
the
respondents
addressed to the complainants explaining the reasons for
increase
in
the
cost
and
also
stating
that
the
complainants were at liberty to visit the construction
office to ascertain the detailed working and calculations
for the escalation charges. It is also noted that in Clause
– 4 of the Agreement, it was clearly mentioned that the
decision of the respondent company in that respect shall
be final and binding on the apartment allottee. Without
going into the question of quantum of the escalation, it is
felt that this provision in the Agreement cannot be
termed to be against any public interest, particularly
when there was no effort on the part of the respondents
to conceal explaining the details of the excess escalation.
Any dispute with regard to the extent of escalation
charges would, however, be in the nature of civil dispute,
per-se, which cannot be agitated herein this Forum. As
115
far as the increase in the area is concerned, the need for
this increase had been explained by the respondents
which was for common benefit and it was only a
marginal increase in the total area.
escalation beyond
the contracted
The cost of
period
was
also
absorbed by the respondents. With regard to the other
extra charges claimed on account of fire fighting system
and external electrification they were clearly covered
under the provisions of the Agreement which said that it
would in addition to the basic cost of the apartment.
The Commission also takes note of the fact that the
complainants had made payment of extra charges for the
first instalment and sought extension of time which was
granted by the respondents, but thereafter defaulted in
making payments. This act of the complainants clearly
indicates that they were aware of their liability for
making payment of these extra charges based on the
Agreement signed by them, as they had understood and
it cannot be argued now by them that these provisions of
the Agreement were either restrictive or unfair trade
practices within the meaning of the Act.
Therefore, it
does not lie in the mouth of the complainant now to say
that the said extra charges were not legally chargeable or
receivable by the respondent company particularly on
the face of the Agreement which was acted upon by the
complainants.
There is, therefore, no ground to hold
Clauses 4 and 16 as restrictive or unfair in the
116
circumstances.
Therefore, on this count also the
allegations are not proved and it is held so.”
[Emphasis supplied]
In the light of the propositions laid down in the above noted
judgements and the order passed by the Commission in B.B. Patel’s case,
we shall consider whether the respondent is guilty of unfair trade practice
as defined in Section 36-A, whether any order under section 36-D
deserves to be passed and also whether the complainants are entitled to
interest on the amount deposited by them.
33.
A recapitulation of the facts shows that the respondent had issued
advertisements in the Press and through hoardings for its projects,
namely, DLF Beverly Park and DLF Regency Park to attract public to book
apartments. Each of these advertisements contained the following note :
“Detailed terms and conditions at the DLF office.”
34.
Complainants Nos. 1 and 2, who do not claim to be illiterate
persons filled the application form dated 20.05.1993 for allotment of a
residential apartment in DLF Beverly Park, DLF Qutub Enclave Complex,
Phase – II, Gurgaon. They applied for Apartment No. A, 1st floor in the
12th building proposed to be constructed at DLF Beverley Park. By doing
so, they not only read and understood the contents of the application
form but also unequivocally accepted the terms and conditions for
allotment, which form part of the application form, some of which have
been extracted in the earlier part of this order. By virtue of Clauses 3 and
4 of the terms and conditions, it was made clear to the complainants that
117
the plans, designs, specifications etc. were tentative and the respondent
company
reserves
the right
to
make such
variations, additions,
alterations and modifications as may be considered fit and proper. The
company also reserved the right to effect suitable and necessary
alterations in the layout plan of the building or block of buildings. The
complainants expressly agreed for variations, additions, alterations and
modifications. He also agreed to pay external development charges for the
external services to be provided by the Government. In terms of Clause
11, the company agreed to make an endeavour to give possession of the
apartment to the intending allottee(s) within a period of two and a
half/three years from the date of booking of the apartment on complete
payment of the sale price and other charges due and payable upto the
date of possession. That clause also provided that in the event of nondelivery of possession, the intending allottee shall continue to pay the
agreed equated quarterly instalments including interest @ 18% on
reducing balance payment basis.
The complainants had signed the
agreement with open eyes and after fully understanding the same. They
also signed Apartment Buyer’s Agreement of which the terms and
conditions stipulated in the application form were treated as part. The
Apartment Buyer’s Agreement envisages payment for proportionate share
of the cost of external electrification and all fire safety measures apart
from the external development charges levied by the Director, Town and
Country Planning, which could be increased in future.
By virtue of
Clause 13 of the Apartment Buyer’s Agreement, the complainants agreed
that the respondent may make such variations, additions, alterations and
modifications as may be deemed fit and proper or as may be done by the
competent authority.
Clause 15 thereof contemplated completion of
118
multi-storeyed buildings as per the plans and specifications seen and
accepted by the apartment allottee(s) that such variations, additions,
alterations and modifications in the layout and building plans and
specifications, as may be considered necessary or as may be required by
the competent authority while sanctioning the building plan or at any
time thereafter.
The complainants also agreed that in future, their
consent for such alterations etc. will not be required. Clause 16 of the
Apartment Buyer’s Agreement did contain a stipulation that the
possession of the premises is proposed to be delivered to the apartment
allottee within two and half years / three years from the date of booking
but at the same time, that clause clearly contemplated delay in the
delivery of possession without any liability of the company. The company
could also extend the time for completion of building due to nonavailability of steel and/or cement or other building materials, or water
supply or electric power or slow down strike or due to a dispute with the
construction agency, civil commotion etc. By virtue of Clause 18, the
allottee was given option to terminate the agreement and seek refund of
the amount already paid.
35.
The use of expression ‘endeavour to give the possession’ in Clause
11 of the terms and conditions of the application form and use of
expressions ‘proposed to be delivered by the company’ to the apartment
allottee in Clause 16 of the Apartment Buyer’s Agreement clearly show
that the company has merely held out a hope that it will try to give the
possession of the apartment allottee within a specified time. However, no
unequivocal promise was made to the prospective buyers that possession
of the apartment(s) will be delivered at the end of a particular period.
119
That apart, if the terms and conditions incorporated in the application
form and various clauses of the Apartment Buyer’s Agreement are read
together, it is impossible to draw an inference that the respondent had
undertaken an obligation to handover possession of the apartment to the
complainants at the end of 2½ or 3 years period. As a corollary to this, it
must be held that the respondent had not made any false or misleading
representation to the complainants on the issue of delivery of possession
of the apartment and, thereby, induced them to apply for the apartment.
36.
The complainants have not specifically pleaded that they were
misled by the advertisements coupled with the terms and conditions
contained in the application form in believing that they will get the
possession of the apartment at the end of 2½ or 3 years period. Even the
evidence produced by them in the form of affidavit dated 30.08.2000 filed
by Complainant No. 2, Shri Kunal Verma is very vague. He, by and large,
reiterated the averments contained in the compliant.On the question of
the alleged promise made by the respondent to deliver the possession of
the apartment within 2½ / 3 years, Shri Kunal Verma made the following
statements
“2.
We filed the present proceedings being aggrieved,
among other things, by the failure of DLF Universal to
handover the possession of our apartment 1201-A in DLF
Beverly Regency Park –II, Gurgaon (Haryana), within the
time period original agreed, despite our having paid the
entire sale consideration to DLF in terms of the booking
of May 1993 and the subsequent Agreement dated
120
14.3.1994 entered into between us and DLF for the sale
of said apartment.
The failure of DLF to handover the possession of the
said apartment within the stipulated period, to us is in
gross violation of the terms of the agreement entered into
between
the
parties
and
according
to
which
the
possession of the said apartment was to be handed over
to us within two and a half / three years of the date of the
booking of the apartment, which period expired in and
about November, 1995. The delay on the part of DLF to
hand over the possession of the apartment was wholly
unexplained and amounted to an unfair trade practice.
I say that DLF has also not paid any interest, for
the said period of delay, on the sale consideration
amounting to Rs. 21,803 paid by us by November, 1995.
DLF has by its circular / letter dated 21.4.1997, admitted
that the construction of the Apartment in question was
then i.e. in April, 1997, yet to be completed. DLF had, in
fact, communicated to us, vide letter dated 21.4.1997
that they proposed to hand over possession of the
Apartment in March 1998 subject to their obtaining
Government Approval.
3.
DLF in the years 1992-1993, extensively advertised
vide hoardings and other publicity material, inviting
bookings for apartments in their proposed apartment
121
complex by the name of DLF Beverly Park Apartments in
Gurgaon (Haryana).
4.
Induced by the said advertisements of DLF, my wife
and I – the Complainants Nos. 1 and 2 met the officials of
DLF on various occasions in the year 1993.
My wife and I were in dire need of residential
accommodation.
We, acting upon the assurances given
by the officials of DLF that the possession of an
apartment in the project in question would be handed
over to us latest at the expiry of two and a half/ three
years from the date of the booking of the Apartment,
agreed to book an apartment in the said project.
5.
On 20.5.1993, we booked an Apartment No. 1201A
at Beverly Park –II, DLF Qutub Enclave Complex and paid
a sum of Rs. 1,93,596/- towards registration money
thereof, being 10% of the total Sale Consideration.
Copies
of
the
letter
dated
29.5.1993
of
DLF
acknowledging the booking of the said Apartment and the
acknowledgement of the said payment issues by DLF are
EXHIBITS C-1 & C-2 respectively.
6.
We entered into a payment plan according to which
the balance
payment of
the sale
consideration
of
Rs.19,35,960/- in respect of the said apartment was to be
paid to DLF in periodic instalments over a period of two
122
and a half years from the payment of the aforesaid
booking/ registration amount. Additionally, DLF charged
certain other monies, over and above the aforesaid sale
consideration, towards External Development Charges,
Preferential
Charges,
Contingency
Security
Deposit,
maintenance security etc., thereby making the total sum
payable to DLF as Rs. 21,00,803/-.
The said monies
were to be paid to DLF within the time periods as
stipulated.
7.
We adhered to the schedule of payments agreed
between us and made payments to the DLF according to
the payment / instalment plan as set out hereinbelow :______________________________________________________
S.No.
DATE OF
AMOUNT PAID
PAYMENT
______________________________________________________
1.
20/05/1993
Rs.1,93,596
2.
06/06/1993
Rs. 3,30,000
3.
06/07/1993
Rs. 2,00,000
4.
13/07/1993
Rs. 1,00,000
5.
19/08/1993
Rs. 1,00,000
6.
19/09/1993
Rs.
7.
25/11/1993
Rs. 3,50,000
8.
29/09/1994
Rs.
9.
27/12/1994
Rs.
75,000
15,000
60,000
123
10.
27/12/1994
Rs.
15,000
11.
09/02/1995
Rs. 5,00,000
12.
22/03/1995
Rs.
15,000
13.
07/07/1995
Rs.
15,000
14.
07/07/1995
Rs.
15,000
15.
25/09/1995
Rs.
15,000
16.
20/11/1995
Rs.
73,890
17.
06/01/1996
Rs.
15,000
18.
30/06/1996
Rs.
15,000
19.
30/12/1996
Rs.
15,000
_____________________
Total
Rs. 22,47,898/______________________
(Rs. Twenty Two Lakhs, Forty seven thousand, eight
hundred and ninety eight only) inclusive of car parking
slots for two cars.
Receipt executed by the Respondent Company
acknowledging the above payments are EXHIBIT C-3
Collectively.
It may be noted that the payment plan in respect of
the said apartment ended as per schedule on 20.11.1995
with the payment of the last instalment of Rs. 73,890/-.
The payment of instalments, as item Nos. 8, 10, 12, 13,
14, 15, 17, 18 and 19, amounting to a total of Rs.
1,35,000/- were in respect of two parking spaces booked
by the Complainants and which were not a part of the
Agreement entered into between the parties and do not
124
form a part of the Sale Consideration in respect of the
Apartment in question. An additional Rs. 30,000/- had
been adjusted by DLF towards the said parking space
from the main schedule of payments.
8.
In terms of the Agreement dated 14.3.1994 entered
into by the parties, the said Apartment was to be
delivered to us within a period two and a half /three
years from 20.5.1993 and which period came to an end in
the month of November, 1995. We had duly paid all the
instalments in respect of the said Apartment within the
time stipulated in the payment plan and which period
ended in November, 1995. DLF gave us interest @ 18%
for any early payment made by us to them.
It is stated that we were forced to sign the said
agreement under threat of forfeiture of 10% of the monies
paid by us we had by then paid in excess of Rs. 13,48
lacs.
Clause 16 of the said Agreement between the
parties reads as under :“16 : THAT the possession of the said premises is
proposed to be delivered by the Company to the
Apartment Allottee within two and half/three years
from the date of booking of the Apartment.
The
Company shall not incur any liability if it is unable
to deliver possession of the said premises by the
time aforementioned.
If the completion of the
125
building(s) is delayed by reason of non-availability
of steel and/or cement or other building materials,
or water supply or electric power or slow down
strike or due to a dispute with the construction
agency employed by the Company, civil commotion
or by reason of war, or enemy action, or earthquake
or any act of God or if non-delivery of possession is
as a result of any act, notice, order, rule or
notification of the Government and/or any other
public or competent authority or for any other
reason beyond the control of the Company and in
any of the aforesaid events the Company shall be
entitled to a reasonable extension of time for
delivery of possession of the said premises.
The
Company
as
a
result
of
such
a
contingency arising reserves the right to alter or
vary the terms and conditions of allotment or if the
circumstances, beyond the control of the Company
so warrant, the Company may suspend the scheme
for such period as it may consider expedient and no
compensation of any nature whatsoever can be
claimed by the Apartment Allottee for the period of
suspension of the Scheme.
In consequence of the Company abandoning
the Scheme, the Company’s liability shall be limited
to the refund of the amount paid by the allottee
126
without any interest or any other compensation
whatsoever.”
Accordingly, the possession of the apartment in
question was to be handed over to us within a period of
two and a half years / three years from the date of the
booking of the apartment save for the force majeure
conditions as stipulated in Clause 16.
Further, by clause 18 of the Agreement and its
allied provisions time was made the essence of the
Contract.
In not handing over the possession of the said
Apartment within the time specifically agreed upon by the
parties, DLF has acted in violation of the terms of the
Agreement and we are liable to be compensated for the
delay.
18.
We booked the flat on 20.5.1993 by payment of
10% of the total sale consideration. The possession of the
said Apartment, was to be handed over at the expiry of
two and a half / three years of the said date and which
period ended in the month of November, 1995.
The
possession of the apartment was eventually handed over
to us, on or about 26.2.1999 after the filing of the present
Complaint and after directions in this behalf by this
Hon’ble Commission and the Hon’ble Supreme Court of
India. The delay in handing over possession of the said
127
Apartment within the time as agreed upon by the parties,
has caused grave loss, financial injury and undue
hardship to us as we had no residential accommodation
and were forced to live out of our office at 702, Ram
Vihar,
Sector
30,
NOIDA
for
six
months between
15.9.1998 and 28.2.1999.
19.
I made inquiries as regards the status of the said
apartment and the reasons for the failure of DLF to hand
over the possession. Between December 1995 and April
1997 there was no intimation by DLF to us. In response
to the large number of enquiries, repeated visits and
numerous telephone calls made to DLF, we received a
circular/letter dated 21.4.1997 which is EXHIBIT C-11.
37.
On the question of demand of extra charges, Complainant No. 2
made the following statements :
“21. We were shocked to receive another communication
dated 2.6.1997 EXHIBIT C-12 from DLF, whereby “extra
charges”
amounting
to
Rs.
8,87,825/-
have
been
demanded from us towards the following :
1. Cost increased on account of increase in area by 17.776
sq. mtrs.
Basic Sale Price
Rs. 1,53,083.00
Preferential Location Charges Rs.
4781.00
External Development Charges Rs.
6684.00
-----------------Rs. 1,64,548.00
2. Escalation charges on ‘material and labour’
128
worked out for the contracted period only,
payable in terms of Clause No. 4of the agreement :Rs. 1541.83 per sq.mtr. :
( Rs. 143.24 per sq. ft.)
Rs. 3,74,043.00
3. Cost in terms of Clause No. 2(b) of the agreement
(c) External electrification including 24 hour backup power, sub-station and DG sets etc.:Rs. 910.63 per sq.mtrs.)
( Rs. 84.60 per sq.ft.)
Rs. 2,20,915.00
(d) Fire fighting measures including sprinkler system
And smoke detectors:Rs. 528.94 per sq.mtr.
( Rs. 49.14 per sq.ft.)
22.
Rs. 1,28,319.00
-----------------Rs. 8,87,825.00
------------------
The demand towards extra charges is illegal.
By
clause 15 of the Agreement DLF was entitled to make
additions, alterations and modifications in the lay out and
building plans. Alterations are further defined in clause
15 as involving changes in the Apartment viz. its position,
dimensions, area or number. Clause 15 further provides
for monetary settlement only in the event of the alterations
as defined i.e. change in covered area of the Apartment,
and not for the other cosmetic changes or change of super
area.
According to DLF there is no change in the covered
area of the Apartment in question. The change in area is
for the reason as stated by DLF in their Circular dated
April 21, 1997 (Exhibit C-11).
The said fact is further
129
placed beyond controversy by the Circular of DLF dated
September 6, 1997 is EXHIBIT C-13.
DLF have sought to make unilateral “improvements”
and not alterations as defined in clause 15.
As per the circulars of DLF the “improvements” are
not additions to those specified in the Agreement and
pertain to providing, inter-alia, of ‘extra lift’, ‘larger
impressive entrance hall’, ‘larger size tiles’, ‘imported
marble’, etc. etc. as also the inclusion of ‘built up area of
the club’ in the common area for purposes of computing
super area.
The escalations as demanded by DLF towards
increase in area are not in accordance with Agreement as
the covered area of the Apartment is unchanged.
25.
The escalated demands now made towards material
and labour are wholly opaque and not transparent at all.
We ought not to be saddled with these additional labour
and material costs, inter-alia, for two reasons; firstly
material costs are only on account of larger super area not
contracted to be paid for by us under the Agreement; and
secondly the labour charges ought not to have been
enhanced for defaults / delays of DLF. DLF in their reply
claim that these have been computed only till 1st March
1996 and that the same represent a 6% increase.
This
130
assertion is bereft of any supporting documents / data
which has not been filed by DLF before the Hon’ble
Commission. No audited accounts have been filed by DLF
before this Hon’ble Commission or supplied to us.
No
inspection of the documents has also been offered to us by
DLF.”
38.
In his cross-examination, Complainant No. 2 made the following
statements :
“……… Advertisement referred to in para 14 of the
affidavit is hoarding, which I saw near the Qutab and
according to which possession was to be handed over
within 2½ years from the date of booking.
Hoarding
advertised for Baverely Park. When I visited the office of
DLF, Shri Vikas Kulkarni, an employee of the respondent,
give the time frame of handing over the possession.
There was no mention of the time frame in the hoarding.
The possession of the flat in question was given on 1st
March, 1999.
I cannot say that when the additional
charges were paid, but they were paid according to the
schedule in four instalments.
An application form was
also given for two parking spaces i.e. one initially and the
second one subsequently and the sale deed was sent later
on. I have got the possession of the parking spaces and
payment has also been made in respect thereof.
No
notice of cancellation of the allotment was given by me as
I
had
already
paid
the
substantial
part
of
the
131
consideration. The agreement has been signed by all the
four
complainants.
Each and every
page
of
the
agreement has been signed, to the best of my knowledge.
The application form was signed only by complainant
nos. 1 & 2.
It was clarified orally on behalf of the
respondent that if any payment is made in advance, it
will be entitled to certain rebate. It is correct that some
rebates were given by the respondent against advance
payments………… I asked for audit of the account of the
respondent on more than one occasions orally. I did not
ask for the reply. The reasons for extra charges claimed
by the respondent, as I understand, have been indicated
in para no. 21 of the affidavit. It is not correct that the
extra charges as demanded were strictly in accordance
with the contract. It iscorrect that the respondent’s letter
of 21st April, 1997 mentions the fact ‘non-approval of the
Govt.’ as one of the reasons for delay...”
39.
From the statement made by Shri Kunal Verma in his cross-
examination, it is clear that the advertisements issued by the respondent
through hoardings did not contain any time-frame for delivery of
possession. His only assertion is that an employee of the respondent had
given the time-frame.
He pleaded ignorance about the time when the
additional charges were paid and that non-approval by the Government
was one of the reasons for delay.
132
40.
In the affidavits filed by three witnesses of the respondent, namely,
S/Shri Raj Kumar Singhal, Anil Kumar Gupta and K. Swaroop, they
reiterated what was pleaded by the respondent. In paragraphs 3 to 7 of
his affidavit, Shri Raj Kumar Singhal stated as under :
“3.
The “Escalation Charges” were demanded @ Rs.
143.24 per sq. ft. The break up of the statement of
the escalation charges, on the basis of which the
aforesaid demand was made, is annexed herewith
and marked as Annexure –A. It may be mentioned
here that these weighted average rates are taken on
the basis of the actual prevailing rates. M/s. Prem
Arun Jain & Company, Chartered Accountant have
also
verified
the
records
maintained
by
the
Respondent and audited the escalation charges
recoverable from apartment Allottees, which worked
out to Rs. 179.55 sq. ft. of saleable area; copy of the
certificate dated 6/11/2002 issued by M/s. Prem
Arun Jain & Company is annexed herewith and
marked as ANNEXURE –B in respect of Beverly
Park –II.
4.
I say that the applicants have not been charged
escalation
charges
having
arisen
after
the
contracted period i.e. after March, 1996 and all
such increases in the cost arisen thereafter are
being borne by the Respondent.
133
5.
I say that the charges levied towards external
electrification and fire fighting measures are in
accordance with clause 2(b) of the Agreement.
External electrification includes 24 hours backup,
DG sets, sub station etc.
I say that the scope of
external electrification covers the entire range of
equipment and facilities required and necessary to
transmit electricity from the external boundaries of
the complex to each individual flat.
Additional
stand by generators as well as sub-station installed
to step down incoming high voltage to domestic
voltage are included in the scope of external
electrification. The total cost incurred on material,
labour, works contracts and installation of exhaust
fans for the smoke exhaust system falling in this
scope have been prorated over the entire built up
area,
thus arriving at
the figure of
external
electrification cost on a per sq. feet basis. However,
the cost of internal wiring, switches etc. within the
apartment
are
electrification.
not
included
in
the
external
A detailed working of the external
electrification and fire fighting charges done by the
Respondent shows that the total fire fighting
charges for the Beverly Park –II complex are Rs. 244
lakhs and the total external electrification charges
for the Beverly Park-II Complex are Rs. 473 lakhs.
134
The Respondent had demanded Rs. 49.14 per sq. ft.
of saleable area for fire safety charges for the
Apartment Allottee and Rs. 84.60 per sq. ft. of
saleable area for external electrification charges
which
corresponds
to
the
workings
of
the
Respondent herein; copy annexed herewith and
marked as ANNEXURES –C.
6.
I say that the Respondent Company in order to
ensure better fire safety and in order to meet the
statutory fire safety standards in the modern high
rise
buildings,
have
made
provision
for
fire
detection/fighting equipment and facilities, and the
total cost of these facilities has been prorated over
the built up area of the entire building in arriving at
per sq. feet cost basis.
In addition to the normal
provision of fire water storage facilities, multiple fire
pumps, we risers, smoke detectors, fire panels etc.
sprinklers
have
been
installed
extensively
throughout the building to further ensure better
safety.
7.
As the above charges are only for the direct costs
incurred on material labour, works contracts and
installation charges in no way include any charges
incurred for overheads and other expenses which
are necessarily incurred on such amounts. Even
though strictly they form and represent a part and
135
scope of such recoverable costs, the Respondent
has opted to absorb them.
In view of this the
imposition of Rs. 8,87, 825/- as extra charges are
not disproportionately high, unfair and arbitrary. “
41.
Shri Anil Gupta, who was Chief Architect of the respondent gave
details of the steps taken for securing approval and the modifications and
additions made in the Beverly Park. This is evident from paragraphs 3 to
7 of his affidavit, which are reproduced below :
“3.
I say that the Respondent had applied to the
Director, Town & Country Planning, Haryana (DTCP)
from time to time for approval of the Buildings
Plans.
The Director, Town & Country Planning
sanctioned the building plans from time to time. It
may be clarified that the Respondent on 29.5.1993
and 6.9.1993 had applied to DTCP for Beverly ParkI, which was sanctioned on 15.10.1993 vide Memo
No. 15737; copy of the said applications and the
corresponding sanction of DTCP is annexed herewith
and marked as Annexure –A and Annexure –B,
respectively.
Further, the Respondent applied on
12.8.1993 and 4.11.1993 to DTCP for Beverly ParkII, which was sanctioned on 27.1.1994 vide Memo
No. 886; copies of the paid applications and
sanctions are annexed herewith and marked as
Annexure –C (colly) and Annexure –D respectively.
Revised Building Plans were submitted by the
136
Respondent to DTCP for Beverly Park –I and
resubmitted by the Respondent to DTCP for Beverly
Park
and
resubmitted
on
28/3/1997
after
corrections to meet the objection raised by DTCP on
18/6/1996.
The said revised Building Plans were
sanctioned on 28.4.1997 vide Memo No. 5423 by
DTCP; copies of the application and sanction are
annexed herewith and marked as Annexure –E
(colly) and Annexure –F respectively.
Revised
Building
by
Plans
Respondent
27/12/1996
to
were
DTCP
and
also
for
submitted
Beverly
thereafter
Park
II
resubmitted
the
on
on
28/3/1997 after corrections to meet the objections
raised by DTCP.
The revised Building Plans were
sanctioned by DTCP on 28.4.1997 vide Memo No.
5419; copies of the application and sanction are
annexed herewith and marked as Annexure –G
(colly).
A true copy of the sanction letter dated
28/4/1997 is annexed herewith and marked as
Annexure –H.
4.
I say that the Respondent has, in fact carried out a
large number of Improvements and modifications
and additions in the Beverly Park Complex, which,
inter alia, include Beverly Park I and Beverly Park II
where the apartments of the Applicant’s herein were
also situated – were as follows :
137
(i)
Extra
lift
provided
for
services/material
movement in each tower.
(ii)
Large and impressive entrance hall provided
at ground floor with a double height and
better aesthetics.
(iii)
Large size terrazzo tiles and imported marble
provided.
(iv)
100%
standby
generators
provided
for
uninterrupted power supply.
(v)
The service core, which includes service stair
case, service lifts and two entries to the
servant’s room, was also redesigned in a
manner as to segregate it from the main
apartment circulation by providing separate
door to the service lobby, the fire escape stair
case and changes in elevation.
5.
I say that all the modifications/additions, which are
sought to be brought in the Beverly Park Complex
have to be approved by the competent authority
before its execution.
At every stage and for every
addition/modification the Governmental approval is
required and in this particular scheme major
additions and modifications have been brought
about
which
are
in
consumers
interest
and
convenience and the allottee has given his consent
to such variations and modifications as enumerated
in clauses 13 and 14 of the Agreement. I say that
138
the tentative layout plan was approved by the
Government at the time of signing of the Agreement.
In fact in the preamble of the Apartment Buyer’s
Agreement itself, it is mentioned that the company
plans to develop the site for group housing by
constructing new multi-storey buildings on the said
land in accordance with the Building Plans as may
be approved by the Director, Town and Country
Planning Department, Haryana.
6.
I say that the area determined at the time of
allotment of the Apartment along with the common
space is always tentative and approximate as each
and every project invariably undergoes certain
changes, alterations and modifications during the
currency of the project which fact has clearly been
enumerated in the preamble and under Clause 15 of
the Apartment Buyer’s Agreement.
I say that the
super area of the Apartment in Beverly Park was
increased to 2611 sq. ft. which included the increase
of common area to 350 sq. ft. and the addition of
terrace area of 111 sq. ft.; copy of the revised layout
plan
is
annexed
herewith
and
marked
as
ANNEXURE –I.
7.
In
this
Complex,
the
Respondent
has
also
constructed a Swimming Pool and a Recreational
Club, which includes Gymnasium facilities etc.
It
139
may also be mentioned here that several items of
finishing
were
upgraded
while
completing
the
project. These upgraded items include extensive use
of imported marble for flooring and cladding as well
as superior toilet fittings etc.; copy of photograph of
Beverly Park Complex are annexed herewith and
marked as ANNEXURE –J.”
He also produced the entire correspondence with the Director, Town
and Country Planning, Haryana on the issue of grant of approval to
various changes/modifications/variations/alterations made in the layout
plans, building plans and amenities.
In the second affidavit filed on
13.11.2002, Shri Anil Gupta made the following statements :
“2.
The total number of apartments in Beverly Park,
which included Beverly Park I & II, were around 340
(158 in I and 182 in II). The respondent had offered
different payment plans to the allottees, which
included 2½ years, 7½ years and 10 years payment
plan.
This was to facilitate the allottee in making
payment of easy instalments staggered over a period
of time.
3.
I say that the Respondent had applied to the
Director, Town & Country Planning, Haryana (DTCP)
from time to time for approval of the Buildings
Plans.
The Director, Town & Country Planning
sanctioned the building plans from time to time. It
140
may be clarified that the Respondent on 29.5.1993
and 6.9.1993 had applied to DTCP for Beverly ParkI, which was sanctioned on 15.10.1993 vide Memo
No. 15737; copy of the said applications and the
corresponding sanction of DTCP is annexed herewith
and marked as Annexure –A & B, respectively.
Further, the Respondent applied on 12.8.1993 and
4.11.1993 to DTCP for Beverly Park-II, which was
sanctioned on 27.1.1994 vide Memo No. 886; copies
of the paid application, objections of DTCP and
sanction are annexed herewith and marked as
Annexure –C, D & E respectively. Revised Building
Plans were submitted by the Respondent to DTCP
for
Beverly
Respondent
Park
to
–I
DTCP
and
for
resubmitted
Beverly
by
Park
the
and
resubmitted on 28/3/1997 after corrections to meet
the objection raised by DTCP on 18/6/1996.
The
said revised Building Plans were sanctioned on
28.4.1997 vide Memo No. 5423 by DTCP; copies of
the application for approval with the application
submitting fees and sanction are annexed herewith
and marked as Annexure– F (Colly) and Annexure –
G respectively.
Revised Building Plans were also
submitted by the Respondent to DTCP for Beverly
Park II on 27.12.1996 and thereafter resubmitted on
28/3/1997 after corrections to meet the objections
raised by DTCP. After paying the respective fees, the
141
revised Building Plans were sanctioned by DTCP on
28.4.1997 vide
Memo
application
approval
for
No.
5419;
with
copy
of
the
application
for
submitting fees are annexed herewith and marked
as Annexure –H(Colly.) and copy of the sanction is
annexed herewith and marked as Annexure –I.
4.
I say that the Respondent applied for the grant of
Occupation Certificate on 18.7.1997 and 12.11.1997
for Beverly Park I & II respectively, which was
granted by DTCP on 23.6.1998 vide Memo No. 9126
& 9131; copy of the said Occupation Certificates
along with the respective applications are annexed
herewith and marked as
Annexure J &K (colly),
respectively.
5.
I say that the Respondent has, in fact carried out a
large number of Improvements and modifications
and additions in the Beverly Park Complex, which,
interalia, include Beverly Park I and Beverly Park II
where the apartments of the Applicant’s herein were
also situated. The details of the modifications are as
follows :
(i)
Extra
lift
provided
for
movement in each tower.
services/material
142
(ii)
Large and impressive entrance hall provided
at ground floor with a double height and
better aesthetics.
(iii)
Large size terrazzo tiles and imported marble
provided.
(iv)
100%
power backup was introduced for
uninterrupted
power
supply
which
has
become a necessity these days.
(v)
The structure was re-designed after the Latur
earthquake to make the Building earthquake
proof by introduction shear walls even though
it was increasing the cost.
(vi)
Fire fighting system was introduced which
was not mandatory at that time but later on,
this became a mandatory requirement.
(vii)
Club facility was introduced for exclusive use
of residents.
(viii)
After studies of international projects of this
type, by concerned people & Architects, the
total
elevation
treatment
was
changed
because of which it has become a landmark
today.
(ix)
The service core, which includes service stair
case, service lifts and two entries to the
servant’s room, was also redesigned in a
manner as to segregate it from the main
apartment circulation by providing separate
143
door to the service lobby, the fire escape stair
case and changes in elevation.
6.
I say that all these modifications, which were done
in the interest of consumers, the company has
incurred heavy losses.
7.
I say that during construction a crane accident also
took
place,
which
disturbed
the
schedule
for
sometime and the work at site was suspended.”
Along
with
the
second
affidavit,
he
annexed
copies
of
correspondence with various functionaries of the Town and Country
Planning Department of the State Government.
42.
In his cross-examination dated 01.04.2003, R.W.1, Shri Raj Kumar
Singhal made the following statement :
“The contracted period referred to in para 4 of my
affidavit means the period from January 1993 till March,
1996. The cost of escalation is to be charged only up to
March, 1996.
Whatever is stated in note 2 of the
Appendix -1A of the affidavit is correct.
Other than
materials mentioned in Appendix 1-B and 1-C the
materials used are reflected in Appendix 1-A. The figure
6300342.15 is the escalation figure for the material
consumed up to 31.3.96. It is not correct that escalation
from 1.4.96 onwards was to be borne by the respondent
company.
It is wrong to say that the escalation cost
mentioned in col. No. 11 of the statement Appendix 1-A is
144
not to be charged from the allottee. The total escalation
as given in Col. 12 is the total escalation figure given in
Col. Nos. 10 and 11 and the total escalation amount is to
be charged from the allottee. Col. No. 11 represents the
difference between Col. Nos. 8 and 9. The escalation is to
be charged only till March, 1996 which means that the
cost of escalation in respect of materials is to be charged
only till 31.3.96.”
In his further cross-examination held on 16.10.2003, he stated as
under :
“The escalation till March 1996 has been passed on to the
consumers/allottees and increase in prices thereafter has
been absorbed by the respondent and this is what has
been intended to be conveyed in para 4 of my affidavit.
The contracted period is three years from the date of
signing of the agreement. The hatch note at the bottom
of appendix 1-B referred to anti-panels which is item no.
13 in the item description. The date of preparation of this
is May 1997. It is incorrect to suggest that the figures in
this appendix are hypothetical and not actual.
The
escalation figure is not applicable to appendix 1-B
because firm orders were placed and there was no further
increase in prices. The dates on which the orders were
placed for the material are available in the record and
they are not available with me at this time.
Park, there are nine towers.
In Beverly
There is no distinction as
145
such between the apartments in these nine towers except
in terms of built up area.
There are 27 lifts in these
towers. It is correct that there are 22 lifts. The escalation
has been charged only in respect of 22 lifts. Originally,
only two elevators were to be provided per tower. I am
not
aware
whether
any
plan
was
shown
to
the
buyers/allottees. There was a provision for the third lift
which is available on record and I cannot give the date off
hand. ……. I am not aware of the factors responsible for
delaying the project. It is not correct to suggest that the
delay was on account of the installation of service lifts. I
am not aware of the improvements referred to in question
no. 22 on page 331 of appendix C-11. It is correct that I
am not competent to answer questions relating to
improvements carried out in the apartments.
I am not
competent to answer questions regarding preferential
charges. It is not correct to suggest that the respondent
was not competent to charge escalation charges from the
allottees. I am not aware whether the changes made in
the apartments were done unilaterally without the
consents of the allottees. It is incorrect that I have made
a false statement.”
43.
On being cross-examined on 16.2.2004, R.W. 2, Shri Anil Gupta,
made the following statements:
“I have no personal knowledge of the construction of this
project. This affidavit is based on records and I have no
146
personal knowledge of the project in question.
It is
correct that the building plan for Beverly Park –II was
submitted for sanction for the first time in 1993 and it
was sanctioned in January 1994.
The revision in the
building plan was necessitated by several factors, namely,
one additional lift for the movement of servants, bigger
lobby area, better marble flooring, better club facility and
better aesthetics of the building etc.
There was no
demand of the allottees, including the applicant, for any
improvement/revision in the building plan.
It was
decided by the respondent to have 100% power back-up
and no request in this behalf was made by the applicants.
In each block there are two passenger lifts and one
service lift…….. The Completion Certificate was obtained
in June 1998.
Technically, it would be correct to say
that, that is the date when the building is supposed to be
complete in all respects and costs could be worked
out…………… Structural design was changed after the
Latur earthquake. I am not aware whether there was any
communication from the respondent to the allottees
regarding changes in structural design on account of
Latur earthquake. …………It is correct that it is not
mentioned in the revised building plan as the building
plan has nothing to do with the structural design.
Earthquakes are covered by the building norms and the
buildings are required to be constructed in accordance
with those norms.
No objection in this behalf was
147
communicated by Director, Town and Country Planning
(DTCP) at the time when the original plan was sanctioned
or at the time when the revised plan was sanctioned.
Facility of club was paid-for under the original agreement
in terms of area and every allottee has a right to use that
facility………. The facilities, such as, the lift and club,
were additional facilities provided to the allottees and can
be described as improvements also. I am in no position
to differentiate between ‘additions’ and ‘improvements’.
‘Additions’ are ‘improvements’ also, according to my
understanding.
The agreement has been signed by the
allottees and they have given authority to the respondent
to carry out the additions and improvements.
Certain
variations in the apartments were made because of the
big lobby provided by the respondent.”
In his further cross-examination dated 22.07.2004, Shri Anil Gupta
stated as under :
“As far as I am aware, photographs of the buildings were
taken but no written report was submitted.
By elevate
treatment
and
I
meant
architectural
features
total
character of the building. The architectural features are
balcony profile,
architraves
mouldings,
roof
profiles,
colour schemes etc. The cost of the US trip was not borne
by the allottees. I would finish the details subsequently.
(The witness is directed to furnish the details of the US
trip within four weeks. We had conceived of fire fighting
148
measures but it was not mandatory under the law. Fire
fighting measures were provided subsequently for the
purpose of life saving system as this system became
mandatory later on in the year 1998 after completion of
the building. In the agreement there was no provision for
fire fighting measures.
It is correct that the respondent
company has not charged for imported marble and
terrazzo tiles. Latur earthquake occurred in 1993-94 and
after that the respondent company thought that the
provisions should be made for the same.”
In his third cross-examination dated 10.08.2006, Shri Anil Gupta
stated as under :
“I cannot confirm if
some apartments stood allotted to
some of the allottees when the modification of the plan
was introduced.
Similarly I cannot confirm that the
Apartment No.1201-A stood allotted to the complainant
when the modified plan was introduced.
I also cannot
confirm if DLF obtained the consent of the allottees before
submitting their plan for modification with the appropriate
authorities.
I do not confirm the suggestion that the
project got delayed because of the alterations (mentioned
in my earlier affidavit) which we affected in the complex. I
stand by the statement made in para 4 & 5 of my affidavit
dated 12th April 2002. Normally, we do not send team to
foreign countries like USA in relation to a project which is
under execution but in the instant case as it was a
149
prestigious project, it was found expedient by the DLF to
send a team to United States to enhance the quality of the
project. The visit to USA was made after the sanction of
the
original
plans.
I
cannot
comment
upon
the
Management’s decision of sending the team of experts to
USA after the first approval of the authorities had been
obtained.
I further add that the project did not get
delayed because of the visit of experts to USA…… To a
query from the Commission, I confirm that cost of the visit
was not debited to this project. The team on its return did
submit a report, which was supported by photographs.
Some of the photographs are part of the affidavit. Most of
the features exhibited in the photographs along with the
affidavit have been incorporated………There is a clause in
the Apartment Buyer’s Agreement which authorizes the
respondent to bring about suitable modifications during
the progress of the scheme.
I agree that in the layout
plans originally brought out by the respondents, the
facility of a swimming pool and a club house were already
indicated. I have already stated that it was only towards
the improvement/enhancing the quality of the project that
the improvements were being brought about by the
respondents.”
44.
In his cross-examination, R.W. 3, Shri K. Swaroop, made the
following statements :
150
“I would reaffirm the averments made at Para 2 of my
affidavit meaning thereby that in the advertisement issued
for the scheme in question, there was no time-frame
mentioned for handing over the possession.
With
reference to the insertion “detailed terms & conditions at
the DLF office” as in the advertisement at Annexure –A
(Page 15 of my affidavit), I would state that detailed terms
and conditions would refer to the terms and conditions of
the application form/agreement that would be entered
into between the parties. Payment Plan is not related to
the progress of the construction and, therefore, I deny the
suggestion that it would be obligatory on the part of the
respondent to hand over the possession as soon as the
final instalment is paid. My attention has been drawn to
the advertisements placed at Pages 19, 22, 26, 32 and 33
of my affidavit.
In regard to the increase in the cost area as
mentioned therein, I would say that the escalation would
be on account of increase in super area/carpet area, rise
in the prices of material/labour, incidences due to
external electrification and fire-fighting equipments etc.
There were cost escalations also for the factors mentioned
in the last paragraph of the respondent’s letter dated
06.09.2007 at Page 63 of my affidavit.
These features
though not included in the original application when the
applicants were invited were factored into midway and
151
during the course of the progress of the project to enhance
the facilities and the quality of the product and thereby
making the project upgraded. “
45.
The affidavits and cross-examination of the witnesses of the
respondent do not show that any false or misleading representation was
made by the respondent about the time for delivery of possession of the
apartment.
Rather the cross-examination of these witnesses clearly
brings out the fact that delay was caused because several improvements
were made in the design and planning for the benefit of the apartment
buyers and the competent authorities of Government of Haryana had,
after considering the applications made by the respondent, granted their
nod for alterations/modifications.
46.
In our view, once it is held that the respondent had not made any
false representation or misrepresentation about the time of delivery of
possession, which induced the Complainants Nos. 1 and 2 to book the
apartment, it cannot be held that the respondent is guilty of unfair trade
practice as defined in Section 36-A of the Act and no order can be made
under Section 36-D (1) thereof.
47.
The question whether the alterations/modifications/improvements
made by the respondent in the layout plan, building plan etc. for which
complainants had given their unreserved consent and the additional cost
charged by the respondent cannot be made subject-matter of inquiry
under the Act and with reference to Section 36-A.
In any case, after
152
having given unequivocal consent for modifications, alterations, additions,
improvements, etc., which resulted in delay in delivery of possession, the
complainants cannot turn around and say that they are not bound to pay
for such improvements etc. and pray for payment of interest on the
additional amount deposited by them
48.
In the result, we hold that the respondent is not guilty of unfair
trade practice and the complainants are not entitled to any relief.
Consequently, the complaint is dismissed.
[ G.S. Singhvi ]
Chairman
[ Rajeev Kheer ]
Member
18th January, 2016