National Consumer Disputes Redressal
Yash Bir Jaggi vs Unitech Ltd. on 3 February, 2006
Equivalent citations: IV(2006)CPJ123(NC)
ORDER
P.D. Shenoy, Member
1. This is an appeal filed against judgment and order dated 1.6.1998 passed by the Delhi State Consumer Disputes Redressal Commission in Case No. C 174/1995.
Brief Facts of the case:
2. The appellant, Mr Yash Bir Jaggi, who was the complainant before the State Commission, had booked a duplex apartment bearing No. 406 on the 4th and 5th floor in Block No. 6 in Phase I of Group Housing Project called Heritage City Developed by M/s. Unitech Ltd., on Mehrauli Gurgaon Road (Respondent) in his name as well as in the name of his son, Gautam Jaggi, and daughter, Lavanya Jaggi. According to the complainant the price of the apartment was fixed at Rs. 8,85,000, after discussion. The fundamental structure except for certain finishing jobs, such as, painting, polishing of cement mosaic floor, laying of ceramic tiles and installation of fittings in toilets and kitchen, etc., was complete. The work relating to the development of common area and installation of common services was yet to start. According to the complainant, he had agreed to pay Rs. 8,40,750 forthwith, leaving a token balance of Rs. 44,250 to be paid at the time of delivery of the possession. An agreement to this effect was executed between the parties on 11.11.1993.
3. The builder demanded additional amount on the ground that super area has been increased from 2108 sq. ft. to 2343.45 sq. ft. i.e. an increase of 235.45 sq. ft.; Rs. 2,92,931 towards escalation in the cost of construction, and, Rs. 125 per sq. ft. towards the cost of electric substation, fire fighting. installations, water and sewer connection charges. These amounts were payable by 31.1.2005 and 6.2.1995 respectively. The complainant did not pay these amounts. Hence, the builder sent a statement of account as on 28.2.1995 outstanding against the complainant indicating Rs. 7,19,390 plus Rs. 30,000 towards interest free security deposit. Rs. 7,19,390 included charges for payment towards exclusive car parking space. As the amount was not paid, the builder did not deliver the physical possession of the flat.
4. The State Commission dismissed the complaint after hearing the parties.
5. Dissatisfied and aggrieved with the order of the State Commission the complainant has come up in appeal before this Commission. He has, inter alia, urged the following points in his grounds of appeal.
The learned State Commission has erred in quoting out of context a certain statement of the appellant at page 11 in para 8 (b) of his rejoinder to the written statement filed by the respondents herein to come to the erroneous conclusion that the dispute centres around the pricing of the flat which does not fall within the purview of the Consumer Redressal Forum. Charging of Rs. 25,000 for Car Parking Space is contrary to documentary evidence on record. Separate uncovered car parking space for the complainant's flat is distinctly earmarked in the layout plan. Charging for increase in the super area was wrong. The peripheral structure and existing boundaries of the apartment have remained the same since November 1993 when the sale took place. The escalation charges of Rs. 1,52,324 is erroneous, because there was no increase in the cost index as on 1.1.1994 compared to 1.1.1993. The Contingency deposit of Rs. 4,687 is vague. Charging of Rs. 82,021 for Electric Sub-station and Rs. 35,152 for Fire Fighting installations and Rs. 23,434 for water and sewer connections are not based on actual calculations as the calculation sheet for providing basic amenities including the total cost and the cost per flat were not provided to him.
6. The complainant further contended that the external development charges Rs. 18,747 @ Rs. 55 per sq. ft. are included in the lump sum consideration of Rs. 8,85,000. Similarly, he has deposited the electric connection charges to the tune of Rs. 4,200, miscellaneous charges to the tune of Rs. 2,500 and interest on delayed payment to the tune of Rs. 7358. The builder charged stamp duty and registration charges to the tune of Rs. 1,63,438 though the builder is not able to obtain the completion certificate from the Competent Authority, he has also been asked to deposit an interest free security deposit of Rs. 30,000 which is exhorbitant. He also contended that he is not liable to pay any maintenance charges amounting to Rs. 14,651 until the possession of the flat is delivered to him. Another important contention raised in the appeal is that the agreement executed between him and the builder is unequal and legally flawed.
Findings:
7. The learned State Commission has held that the dispute raised by the complainant is not a consumer dispute:
Firstly, we are of the opinion that the dispute raised by the complainant is not a consumer dispute and the complaint is liable to be dismissed on this short ground. The complainant is mainly disputing the various demands raised by the opposite party. The complainant has himself stated at page 11 in para 8 (2) of his rejoinder to the written version filed by the opposite party as follows:
The complaint is however, centered around the extra amounts demanded by the opposite party over and above the amount already paid at the time of purchase.
It has been repeatedly held by the National Consumer Disputes Redressal Commission that pricing of flat or plot is not a factor which falls within the purview of the Consumer Redressal Forum.
Accordingly, the State Commission held as under:
In the light of the above, it is clear that if the opposite party is making any illegal demand, the complainant should approach the Civil Court for redressal of his grievance, that Forum will be competent to take evidence and interpret the agreement entered into between the parties in the light of the evidence.
8. The complaint covers several issues and escalation in the price of the flat is only one of them. In this connection, we would like to refer Section 2 (l)(o) of the Consumer Protection Act, 1986, wherein the word 'service' is defined as: 'service' means service of any description which is made available to potential users (and includes, but not limited to, the provision of) facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both (housing, construction),entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service'. (emphasis added)
9. Through the Amendment of the Act which came into effect on 18.6.1993 'housing construction' has been brought under the purview of Section 2(l)(o) of the Act. The judgments of the Supreme Court and the National Commission, quoted by the State Commission, are not relevant to the case on hand. In a catena of judgments, the Apex Court and the National Commission have brought the building activity relating to housing construction irrespective of the fact that whether the same relates to private bodies, Government bodies or statutory bodies, within purview of the Consumer Protection Act. This has been amply elaborated in the judgments delivered by the Apex Court in Lucknow Development Authority v. M.K. Gupta and further it has been elaborated in Ghaziabad Development Authority v. Batbir Singh . Hence the complaint filed before the State Commission is fully maintainable.
10. Lest there be any doubt that it is applicable to only public bodies it is useful to refer to the judgment of this Commission -Skipper Bhavan, 22 Barakhamba Road Flat Buyers Association(Regd.) v. Skipper Sales (Pvt.) Ltd. and Anr. I (1995) CPJ 210 (NC).
11. This Commission in Jaina Properties Pvt. Ltd. v. Mrs. Kavita Kataria I (1992) CPJ 224, held that:
We are clearly of the view that the expression is wide enough to cover buildings of any type which provide shelter or a roof. Hence, it will include both residential as well as non-residential structures and the activity of construction of residential as well as non-residential structures fall within the purview of the Act.
12. It is useful to analyse the various issues raised by Mr. Yash Bir Jaggi in his appeal, which are as under;
(a) Increase in the super area:
Contention of the learned Counsel for the builder is that super area which was originally agreed to was 2108 sq. ft. excluding the terrace area of 628 sq. ft. and there was no measurement made at the time of signing of the agreement and for any reason if there is an increase or decrease in the super area, revised price would be applicable. At the time of completion of the building, super area measured was 2343.45 sq. ft. Accordingly balance amount payable is calculated as follows:
Rs. 9,25,634 - 7,30,607 : 1,95,027.
13. The learned Counsel for the Appellant contended that the agreement was for lump sum amount and at the time of agreement super structure of the building was complete though measurement was not taken. Only the finishing touches like flooring, distempering, electricity fittings had to be done and hence, the amount paid i.e. Rs. 8,40,750 included the cost of super area. It is illegal and improper to charge extra amount on the ground that super area has increased. This amount was paid after several rounds of negotiations as a lump sum amount for the whole flat including the terrace area. As against this, the learned Counsel for the builder submitted that this amount was paid for the super area measuring 2108 sq. ft. and when the building was completed, it was measured and found to be 2343.45 sq. ft. and the original price which was paid is the earnest money and it was tentative.. He quoted the relevant clause of the agreement:
That the allotment of the said apartment has been made in accordance with the sanction of the Building Plans. However, if for any reasons, any changes are required to be made by the sanctioning authority or otherwise such changes are desired by the company, the company shall have the right to effect suitable and necessary alterations in the plans, layout plans, if and when found necessary, which may involve all or any of the changes namely in the position of the said apartment, change in number of said apartment, change in its boundaries or floor etc. Further, as a result of such changes, if there is any increase/decrease in the super area, described above, revised price will be applicable at the original rate at which the said apartment was booked/allotted. Apart from this, if, for any reasons, whether within or outside the control of the company, the company is not in a position to transfer the said apartment as agreed herein, the company shall be responsible to consider any alternative property or to refund the amount in full with simple interest @ 15 % p.a. (emphasis supplied)
14. In this connection, it would be useful to look into the relevant part of the order of the State Commission on this issue:
To support its contention the opposite party applied for appointment of a Local Commissioner to take measurements. It was opposed by the complainant. The relevant part of order dated 2.7.1996 reads as follows:
'At this stage we do not think that it is necessary to appoint any Local Commissioner as in the rejoinder the complaint does not specifically dispute the measurement given by the O.P., Mr. Jaggi (i.e. complainant) is willing to assume the said measurement to be correct...' Hence, if there is increase in the super area, the complainant is bound to pay the proportionate cost of the increased super area as well as the extra External Development charge at the original rates which is not difficult to calculate.
15. In view of the discussions above, we are of the view that the complainant lost an opportunity to prove his contention that there is no increase in the super area in the lower Fora. Hence, we hold that the complainant is liable to pay the increased cost of super area.
(b) Escalation Charges:
16. Clause 8 clearly mentions about the escalation charges which reads as follows:
The agreed consideration stated above (i.e. in the beginning of the agreement) has been fixed as on 1.9.1991. In that clause the formula for determining the escalation charges is also given. The argument advanced by the complainant is that by the time the agreement was executed in November, 1993, the opposite party must have come to know the escalated price of the apartment and it must have been included in the consideration agreed upon. It is not disputed that by that time the apartments were not totally complete. Final costs can be determined only when the final bills of the contractor, sub-contractors etc., are settled and paid. As already noticed the consideration in the agreement had been fixed as on 1.9.1991. We have not been able to understand how the complainant can get out of this condition.
17. It is the contention of the learned Counsel for the complainant/appellant that escalation charges can only be on the basis of index and that index does not show any increase in the cost from 1993 to 1994:
(a) Cost-index as on 1.12.1990 564
(b) Cost index as on 1.1.1992 664
(c) Cost index as on 1.1.1993 777
(d) Cost index as on 1.1.1994 777
18. He contended that the cost of index between 1.1.1993 and 1.1.1994 being the same, he cannot be asked to pay the escalation charges. Consumer Fora are not expected to adjudicate the issue of escalation charges wherever there is an increase at the time of completion of building or at the time of handing over the possession of flat/plot. Purchaser is bound to pay the escalation charges. This issue has also been discussed by the State Commission. Time and again this Commission has held that escalation charges are not within the purview of this Commission. The head note of the reported decision of the Commission in Revision Petition No. 1826 of 2003 of V.K. Nayar v. Ghaziabad Development Authority III 2003 CPJ 130 (NC), reads as follows:
Consumer Protection Act, 1986 -Section 21 (b) - Housing - Cost Escalation
- Original price tentative, escalation could be made at the time of finalizing of accounts. Fora cannot go into the question of pricing
- possession offered within two years of allotment - Demands as per brochure -
Complaint is dismissed.
Held : It is admitted position that the petitioner was allotted a flat on 17.11.1993 under Indrapuram Scheme, in a draw held on 20.10.1993. Letter of possession was issued on 15.9.1995, through which the respondents also asked for additional payment of Rs. 15,900 plus Rs. 3,048 as lease rent. Original price was tentative thus escalation could be made at the time of finalizing of accounts which is what has been done in this case. Petitioner's request to know the basis of escalation is not sustainable. This demand is neither, as per terms of the brochure attached nor can the Consumer Forum go into the question of pricing. Lease rent is as per terms of brochure.
Since the possession has been offered within two years of allotment and demands being as per terms of brochure, we see no merit in the prayers made.
This revision petition lacks merit, hence dismissed. No order as to costs.
19. Hence it is clear that Consumer Fora cannot adjudicate on this issue.
(c) External Development Charges:
20. Unitech Ltd. (Builder) had collected Rs. 1,10,143 as external development charges from the purchaser of the flat and as there was an increase in the super area they gave a statement of accounts on 28.2.1995-asking the complainant to pay Rs. 18,747. As this issue relates to increase in the super area, v/p hold that it is the consequential payment which automatically follows with the increase in the area, hence, the complainant/appellant is liable to pay the same to the builder.
(d) Car Parking charges;
21. The builder raised a bill of Rs. 25,000 towards car parking charges. It is contended by the learned Counsel for the appellant that this amount is included in the lump sum payment made at the time of agreement and hence, the appellant is not liable to pay the amount to the builder. In fact, he contended that:
The State Commission has failed to notice that separate uncovered car parking space for the appellant's flat is distinctly earmarked in the layout plan included in the printed brochures provided to the appellant herein's flat (6/406) is clearly printed in the space thus earmarked and delineated. The State Commission has failed to take cognizance of the fact that the respondents herein have not denied distinct reservation and delineation of parking space for the appellant herein's flat in the printed brochures, and subsequent demarcation at site exactly in accordance there with in the first instance.
22. In the sanction plan, car parking area was clearly demarcated which meant that he is not expected to pay for the same.
23. The mere fact that the car parking area is clearly demarcated on the ground area, does not mean that it is granted free of cost. The agreement is silent on this issue. Further, in the agreement, it has not been indicated that the complainant is eligible to get car parking area free of cost. Hence, we do not see any reason to conclude that the appellant is entitled to get car parking area free of cost.
(e) Contingency/Deposit:
The learned Counsel for the builder argued that he is liable to pay Rs. 2 per sq. ft. as contingency charges on the basis of Clause 3 of the agreement. The relevantportion of the clause which reads as follows:
The allottee(s) further agree to pay additional external development charges which may be levied by any Government or local authority for the provision of said services attributable to the apartment.
25. It is contented by the learned Counsel for the appellant that he is not liable to pay this, because, the State Commission has commented as follows:
Contingency advance at the rate of Rs. 2 per sq. ft. amounting to Rs. 4,687 has also been demanded. It is not clear why this advance has been asked for but it is a petty amount and does not require interference by us. The parties can settle it after negotiations.
26. As this was not settled by negotiations the learned Counsel for the appellant contended that:
The appellant herein is responsible for any additional external development charges that may be levied by Haryana Government in future as per Clause 3 of the agreement. The demand for contingency advance is meant to cover any possible increase in External Development charges in future. The learned State Commission has failed to appreciate that the respondents herein have no right to count upon a mere contingency into a certainty. The contention that the so called contingency advance shall be refunded if there is no further levy is besides the point. The appellant herein understands that he is responsible for additional levy, if any,. and has undertaken to discharge his responsibility, if and when necessary.
27. Hence, we feel that there is no sound base to charge the contingency advance.
(f) Common Services:
28. The builder has claimed Rs. 82,021 towards electric Sub-Station, Rs. 35,152 towards, fire-fighting installations, Rs. 2 3,434 towards water and sewer connections, Rs. 4,200 towards electricity connection charges- and Rs. 2,500 towards miscellaneous charges.
The break-up for this as submitted by the builder is as follows:
S/Area: 2343.45 F2x © 125.00 per sq. ft. Rs. 2,92,931
(a) Escl. Charges © 65 per sq. ft.
(b) Elect.Sub stan © 35 per sq. ft.
(c) Cost of
fire-Fighting
installation Charges © 15 per sq. ft.
(d) Water and Sewerage @ 10 per sq. ft
@ 125per sq. ft.
FINAL TOTAL COST Rs. 12,76,781
29. We have already dealt with the escalation charges and hence we would only deal with the miscellaneous charges here.
30. Learned Counsel for the appellant stated that his claim is that he is liable to pay only the actual costs of electricity service connection and water and sewerage connection and any other connection required for the appellant. Accordingly, he demanded receipts for the payment of these fees to various appropriate Government authorities for obtaining sewer and other connections. It is contented by the learned Counsel for the builder that it is generally not a practice to provide photocopies of the original receipts issued by the various authorities and detailed calculation sheets to every purchaser of the flat in the building. Almost all the purchasers of the flats have paid these charges and have taken possession of the flats but the appellant's flat is unoccupied, though, possession has been offered' to him. Further to take care of the flat, builder has provided security for the same and arranged maintenance of the flat as there is a litigation pending.
31. We do not consider that these charges are in any way abnormal or illegal as Clause 10 of the agreement provides for the same. The Clause 10 of the agreement which reads as follows:
That the allottee(s) agreed to pay additionally to the company on demand the actual cost of electric services connection, water connection, sewer connection or any other connection, which shall be required for the said apartment.
That the allottee(s) agree to pay additionally to the company as his/her/their share towards the cost of electric sub-station and its installation, and fire fighting installations. The decision of the company in this respect shall be final, conclusive and binding on the allottee(s).
(emphasis added)
(g) Interest on Delayed Payment:
32. It is contended by the learned Counsel for the appellant that:
The interest amount of Rs. 7,358 demanded on delayed payments due on 28.2.1995 relates to extra amounts demanded for so-called increase in super area, escalation charges, proportionate cost of electric substation, proportionate share of fire-fighting measures and water and sewer connections. The demand for interest is not tenable because the demands for principal amounts to which it relates are untenable.
33. As we have already held that appellant is liable to pay the super area charges, cost of various service amenities, interest on delayed payments has also to be paid by the appellant.
(h) Stamp Duty Charges:
34. This is a statutory levy and this is not negotiable. Learned Counsel for the builder assured that they are exactly charging the same amount which is payable to the Registering Authority, hence we do not propose to intervene in this dispute. We hold that the amount is payable by the appellant.
(i) Holding Charges:
35. During the arguments, the learned Counsel for the appellant submitted that company has asked them to pay Rs. 8,95,900 vide their letter dated 5.11.2005 as holding charges. It is no where mentioned in the agreement about holding charges payable by the purchaser of the flat. Hence we consider that these charges are not payable by the appellant.
36. (j) Hence, the complainant is bound to pay, in all, the following amounts:
1. Change in super area Rs. 1,69,524
2. Escalation Charges Rs. 1,52,324
3. Additional External Development charges Rs. 18,747
4. Car Parking charges Rs. 25,000
5. Interest on delayed payment due on 28.02.1995 Rs. 7,358
6. Share towards cost of electric sub-Station. Rs. 80,021
7. Cost of fire fighting installation Rs. 35,152
8. Charges towards water and sewerage Rs. 23,434
9. Electricity connection charges Rs. 4,200 TOTAL : Rs. 5.15,760
37. Accordingly, we direct that the above amount is payable by the complainant with interest @ 10% per annum to the builder from the date of demand till date of payment.
(k) Maintenance Charges and Interest Free Security Deposit for Maintenance:
38. Both these are required to be decided on the basis of Clause (9) of the Agreement which reads thus:
That various common services or facilities including the upkeep, repairs, security etc., of said project/apartment and for maintaining common lawns of the same shall be managed by the company through its maintenance agency, namely City Maintenance Service Private Limited, or any other agency nominated by the company and the allottee(s) hereby agrees to enter into a maintenance agreement for the same with the said agency at the time of taking possession of the said apartment. The allottee(s) shall also be liable to pay the maintenance security as and when and in the manner demanded by the said maintenance agency and shall also pay the maintenance charges in the manner determined and demanded by the said maintenance agency. However, the company shall render all its know-how in respect of the maintenance of all such common services and facilities to the said maintenance agency. The allottee(s) consents to this arrangement whether or not the said project namely HERITAGE CITY is transferred to the Association/Society of the allottee(s) and until such time, the same is terminated by the company or by aforesaid maintenance agency.
39. The aforesaid clause specifically provides that the allottee is liable to pay maintenance security 'as and when' and 'in the manner' demanded by the maintenance agency. In case where possession is offered the allottees are required to pay maintenance charges. Further, as these maintenance charges are taken for common facilities provided to all the allottees, any one allottee cannot take a stand that till he takes the possession of the property, he will not pay the maintenance charges. If that contention is accepted, it would be difficult to engage a maintenance agency for maintaining the apartments as a whole and provide common facilities.
40. Considering the above analysis, it is apparent that the stand taken by the complainant that he is not liable to pay the security deposit and maintenance charges as he has not taken possession of the flat is unjustified. We hold that the complainant is bound to pay the maintenance charges as demanded as well as the interest free security deposit amounting to Rs. 30,000. The above shall be paid with interest at the rate of 10% per annum from the date of demand till the date of payment.
41. (1) In sum, the complainant is directed to:
(i) To pay Rs. 5,15,760 with interest at the rate of 10% to the builder from the date of demand till the date of payment.
(ii) In addition, the complainant shall also pay the security deposit and maintenance charges to the builder/maintenance agency with 10% interest per annum within four weeks from the date of this order, whereupon the builder shall hand over the possession of the flat to the complainant within two weeks thereafter.
(iii) To pay the stamp duty and the registration charges to the builder within two weeks from taking possession of the flat to enable the builder to execute the sale and registration deed within four weeks from the date of the payment.
42. This appeal is disposed of on the above terms.
43. In the peculiar facts and circumstances of the case there shall be no order as to costs.