National Consumer Disputes Redressal
Jagdish Gurnami vs Lucknow Development Authority on 19 January, 2010
RP 2509 / 2002 NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 283 OF 2005 (From the order dated 14.03.05 in Compl. No. 169/2001 of Uttar Pradesh State Consumer Disputes Redressal Commission) Jagdish Gurnani S/o Late Shri Ram Chandra Gurnani R/o V-75, Vatayan, Nehru Enclave, Gomti Nagar, Lucknow Appellant Versus Lucknow Development Authority Through its Vice Chairman, 6-Jagdish Chandra Bose Marg, Lucknow (UP) Respondent BEFORE:- HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MR. B.K. TAIMNI, MEMBER For the Appellant : Mr. Jagdish Gurnani, In person Mr. S.K. Effendi, Advocate For the Respondent : Mr. Vinay Garg, Advocate Ms. Jyoti Sharma, Advocate PRONOUNCED ON 19th JAN. 2010 O R D E R
MR. B.K. TAIMNI, MEMBER Appellant was the complainant before the State Commission, where he had filed a complaint alleging deficiency in service on the part of the respondent Lucknow Development Authority (LDA).
Undisputed facts of the case are that the appellant / complainant in response to an advertisement, deposited Rs.18,000/- on 24.09.89 as registration money applying for a flat with covered area 750 sq. ft in the Premayan category which was later on shifted to Vatayan category of the same scheme. In the brochure the estimated sale price of the apartment was indicated at Rs.3,80,000/-. It was the contention of the Respondent, LDA, that due to some problem with the labour and the respondent, letter of allotment could be issued on 10.01.91 in which again the estimated price was given Rs.3,80,000/- against which the complainant paid Rs.1,94,000/- in 10 instalments. But the possession of the flat was not given despite a provision in the brochure, that after payment of 40% of the amount, the possession shall be given. Finally, vide letter dated 10.09.01, the respondent LDA demanded the balance amount placing the revised cost of flat at Rs.6,84,895/-. It is not in dispute that the appellant was put in possession of the flat on 4.4.01 allegedly, full of defects and discrepancies and use of substandard material in the construction. It is in these circumstances, a complaint was filed before the State Commission with the following prayer:-
(i) to pass an order directing the opposite party not to charge the price in excess of the bargaining price of Rs.3,80,000/- for the flat;
(ii) to pass order directing the opposite party to pay interest @24% on the deposits made by the complainant;
(iii) to pass order for awarding compensation of Rs.3,00,000/-;
(iv) to pass order for awarding cost of Rs.11000/-.
The matter was contested by the respondent before the State Commission and the State Commission after hearing the parties and perusal of material on record, disposed off the complaint in following terms:-
Without being exhausting, it is appropriate in the circumstances to take into consideration the following factors while showing the estimated sale price in the brochure while ultimately fixing the final costing.
1. Escalation cannot be arbitrary or erratic;
2. Specific terms and conditions with regard to the escalation of the cost of house / flat be mentioned in the brochure and in this connection the mandate contained in KDA v/s Sheela Devi (Supra) be strictly adhered to;
3. While floating the scheme and mentioning in the brochure about the escalated sale price, reasonable factors which determine the cost be thoroughly considered and taken into account and every effort in normal circumstances be made not to increase the cost more than 10% of the estimated sale price shown in the brochure particularly in the schemes touching the lower income group or middle income group as in the event of increase in the final cost by more than 10%, it adversely affects the purchase of these two groups which frustrates the objectives of the developmental bodies;
4. Final costing of construction is to be confined in ordinarily cause whose out off date should be the completion of the construction of the house / flat.
5. Development Authorities are not traders and they cannot be permitted to enter into restrictive trade practice as defined under section 2 (nnn) of the Act;
6. The increase must be rational based on materials and since the allotment matters are subject to judicial scrutiny, the direction of escalation must be based on objective satisfaction and not on subjective satisfaction;
7. Increase of the cost only on the ground of delayed delivery of possession will not be justifying unless disabling factors of handing over the delayed possession has been caused by the allottee or the delay in delivering the possession was beyond the control of the Development Authority;
8. The plea that the possession had to be delivered delayed on account of the pendancy of cases can be curtailed by having an exhaustive meeting and deliberations as to whether the proposed scheme is free from legal taboos as the litigations mar the purpose of the scheme and frustrates the interest of the consumers.
9. The Development Authority in those cases, in which they fail to provide the possession of the allotted plots, and in case they offer alternative plots in the different schemes, the charging of higher price for alternative plot normally will not be justifiable.
With these observations the complaint is accordingly disposed off. No order as to the costs.
Aggrieved / not satisfied with the relief awarded by the State Commission, this appeal has been filed before us.
We heard the Ld. Counsel for the parties at considerable length and have gone through the brochure as well as the letter of allotment. In the Brochure, the price in respect of flats in Vatayan Category is clearly written as estimated sale-price at Rs.3,80,000/-.
Letter of allotment dated 10.01.1991, clearly spells out the estimated property cost at Rs.3,80,000/-.
Further, there is a note attached as part of the allotment letter which reads as follows:-
Note: Due to some dispute the construction of houses of the above type and development work could not be started as per schedule, although the allotment was made in June 89.
Now the construction of the above type of houses alongwith development work has since been started, the above cost as mentioned is tentative and the actual cost will be worked out on completion of construction of houses & development work. The difference of actual and the above mentioned cost shall be payable on sending intimation to the allottee. In this connection no representation will be considered.
(emphasis supplied) It also needs to be appreciated that the law by now is well settled that the determination of final price will not come within the ambit of Consumer Protection Act, 1986.
This has been the view of this Commission starting with order of this Commission in the case of Himachal Pradesh Housing Board Vs. Surender Mohan Suneja & Anr. [1986-99 CONSUMER 3699 (NS)] in which it was held, ..It has been repeatedly pointed out by this Commission pricing is not a factor falling within the purview of the scrutiny by the Consumer Forum, unless it be a case where there is a fixation of price by law or the price is marked on the container or on goods, where the transaction is one of Sale of Goods. This was also reiterated by this Commission in the case of National Consumer Awareness Group (Regd.) Chandigarh Vs. The Housing Commissioner, Punjab Housing Development Board, Chandigarh [OP No. 238 of 1993 decided on 29.05.1997], in which it was held:-
CPA, 1986 Section 2(1)(e) Consumer dispute pricing price, referred to in various sections is the price fixed by or under any law and not the price fixed otherwise. The price is determined by the Board in accordance with the procedure evolved by it and there is no statutory control over the fixation of the price and the same cannot, therefore, be interfered with. The pricing of flats built by the public authority or plots developed by the authorities is not a consumer dispute.
This was also confirmed by the Honble Supreme Court in the case of Bareilly Development Authority and Another Vs. Ajay Pal Singh & Ors. [AIR 1989 Supreme Court 1076], in which it was held:-
When the brochure indicated estimated costs and other terms of allotment issues - fact that actual cost may increase or decrease is clearly indicated in brochure in view of which increase in cost of houses by development authority cannot be labelled as arbitrary and discriminatory In the case of Ghaziabad Development Authority Vs. Gurudutt Pandey [RP No. 152 of 2002 decided on 21.08.2002] this Commission relying upon the judgement of the Honble Supreme Court in the case of Premji Bhai Parmar & Ors. Vs. Delhi Development Authority & Ors. [AIR 1980 SC 738 [(1980] 2 SCC 129], observed that the price of the property was in the realm of contract between a seller and buyer.
It was, in these circumstances, Supreme Court did not interfere..
The Honble Supreme Court in the case of Premji Bhai Parmar & Ors. Vs. Delhi Development Authority & Ors. [AIR 1980 SC 738 [(1980] 2 SCC 129] held that , ..Price of land, building material, labour charges and cost of transportation, quality and availability of land, supervision of management charges are all variable factors and enter into fixation of prices. Their cost varies time-wise, place-wise and availability-wise. All these factors cannot be overlooked On the other hand, Ld. Counsel for the appellant wishes to rely upon the judgement of the Honble Supreme Court in the case of Kanpur Development Authority Vs. Sheela Devi & Ors. [I (2004) CPJ 12 (SC)], in which the Honble Supreme Court has held, ..in the facts and circumstances involved in the case, the increase in the final cost from the tentative cost was almost 4 times although escalation cannot exceed 10% When we examine the facts of this case, we find that the brochure as well as the allotment letter clearly stipulated the estimated cost of the property at Rs.3,80,000/-. But, in our view, the Note forming part of the allotment letter (reproduced earlier), is immensely relevant in the present case which clearly held that due to dispute the work could not be started and clearly stated that above-mentioned price is tentative and the actual cost be worked out on completion of construction of houses and development work. The difference, if any, was to be shared by the allottees. The very fact that the allotment letter was accepted way back in 1991, hence, the parties shall be bound by the contract, which in this case would be the allotment-letter issued by the respondent to the appellant / complainant. While in catena of judgement passed by this Commission and the Honble Supreme Court, it has been held as refereed to earlier that the price cannot become a matter of consumer dispute and it is clearly held that the parties shall be governed by the terms of the contract, which clearly spelled out in this case, that the price is tentative and final cost would be informed later on. The judgement being relied upon by the appellant does not help the case of the appellant for the simple reason that in the brochure or otherwise, there was no such term limiting the escalation to 10% p.a. in view of which, this judgement will have no applicability in the present case.
We could have considered granting relief to the appellant by way of grant of interest for delay in delivering the possession of the flat but we find that despite taking the possession in 2001, he did not pay the balance 50% amount of the original estimated price till April 2007, i.e., almost after 6 years of taking over the possession. He has not paid even a single penny between 2001 and 2007, thus, the appellant would not be entitled to any relief, as he did not show his bonafide in making the payment in terms of letter of allotment.
In the aforementioned circumstances, we find no merit in this appeal. Dismissed.
No order as to costs.
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(ASHOK BHAN, J.) PRESIDENT ..
(B.K. TAIMNI) MEMBER RS/