National Consumer Disputes Redressal
K.V. Padmanabhan vs Calicut Development Authority on 20 March, 2007
Equivalent citations: II(2007)CPJ287(NC), AIR 2007 (NOC) 1582 (NCC), 2007 (5) AKAR (NOC) 698 (NCC) (NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI)
ORDER
B.K. Taimni, Member
1. The petitioner was the complainant before the District Forum, where he had filed a complaint alleging deficiency in service on the part of the respondent/opposite party, Calicut Development Authority (hereinafter referred to as CDA).
2. Very briefly the facts leading to filing the case were that undisputedly, the complainant in response to an advertisement by the respondent applied for allotment of a plot under Jawahar Nagar Housing Scheme' in Kozhikode City Corporation and had deposited earnest money. Allotment letter was issued on 5.4.1989 through which, the complainant was directed to remit Rs. 20,000 which was done on 19.5.1989 upon which an agreement was entered between the parties on 7.5.1989. The petitioner requested the respondent that he wants to make the lump sum payment of the balance amount which was agreed to and the petitioner paid the total amount on 13.9.1994, after which, with a view to get the loan from LIC, he applied to the petitioners for executing the sale-deed, which was not done and on the contrary the petitioner was directed to sign an 'additional agreement' thus enabling the complainant to charge additional price on account of some additional amount paid to the original land holders. It is in these circumstances that the complainant filed a complaint before the District Forum, who after hearing the parties directed the respondent to execute the sale-deed with respect to allotted plot in favour of the petitioner along with compensation of Rs. 1,000 and Rs. 500 as costs. Aggrieved by this order, the respondent filed an appeal before the State Commission, who after hearing the parties allowed the appeal and set aside the order passed by the District Forum. Hence this revision petition has been filed before us.
3. It is pertinent to mention that this Commission passed the order dated 16.5.2005 in following terms:
Heard the learned Counsel for the parties.
The appellant was allotted a plot by the Calicut Development Authority.
In this case the short question arises as to whether the respondent could increase the settled price of land on account of subsequent payment of enhancement of the amount of the award under Land Acquisition Act by the Authority in terms and conditions of this matter. One of the terms read as under:
NOW THIS AGREEMENT WITNESSETH that the allottee having paid the initial payment of Rs. 20,000.00 the Authority hereby put the allottee in possession of that piece of land, viz., plot No. A-111 situated in Jawahar Nagar Housing Scheme and more specifically described in the schedule hereunder of which, the Authority is the absolute owner by virtue of the award passed under the provisions of the Kerala Land Acquisition Act, 1961 to hold the same, subject to the conditions contained in the regulations prescribed for the scheme, which shall form part of this agreement and those hereinafter appearing.
(Emphasis supplied) The other important clause of the agreement and the regulations are as under:
The Authority hereby agrees to keep and hold the allottee saved and effectually indemnified against all risks, cost, claims and damages whatsoever in respect of the plot allotted to him/her due to any defect in the title of the property held by the Authority.
Clause 'K' Exhibit P-l, which reads as under:
The Authority is at liberty to alter any of the conditions or to add any conditions. If ambiguity arises the interpretation of the authority shall be final.
The agreement virtually does not provide for any tentative price and as such simply subsequently the Authority had to pay enhanced amount of the award relating to the acquisition of the land would not be sufficient to justify the demand raised by the letter at page 132 dated 21.4.1999.
The conditions which could have been altered and modified in terms of the aforementioned Clause 'K' of Exhibit P-l do not appear to have been modified by the Authority in absence of any document etc. Learned Counsel for the respondent submitted that the Secretary acted for the Authority and must have been acting under direction of the Authority by a resolution of the Authority before issuing the demand. However, the demand letter does not refer to any such resolution. As such, this demand letter dated 21.4.1999 could not be a justified demand in any way. Since this aspect has not been considered by the State Commission with reference to all the above provisions, they have probably passed the impugned order as no body drew their attention towards this aspect.
Besides, we feel that the impugned order has to be set aside for another reason in view of the judgment of the Hon'ble High Court of Kerala relating to similar matter in O.P. No. 22700 of 2000, B.M.S. Susheela v. The Secretary, Calicut Development Authority. It may further be mentioned that the High Court had not considered the question of modification of the terms and conditions by the Authority. In any case, we are not concerned with that aspect of the matter at this stage. We feel that the impugned order cannot be sustained as the letter on the face of it, has not been on the basis of any Authority. It is set aside, accordingly.
In view of the aforementioned facts and circumstances the revision petition is disposed of. Parties are left to bear their own cost.
4. Against this order an appeal was filed before the Hon'ble Supreme Court who vide their order dated 9.5.2006 passed the following order:
We find that the question as to whether the Secretary was authorised to issue the letter dated 21.4.1999 never arose for consideration, because no such objection had been taken by the respondent in his application to the District Forum nor was any such objection raised in appeal. For the first time, this objection was raised at the hearing before the National Commission.
In our view, since such an objection was never taken at any earlier stage, the National Commission ought not to have permitted this objection to be raised before it because the matter involved a question of fact as to whether the Secretary was duly authorised by the Authority to issue such a demand letter.
We, therefore, set aside the impugned order of the National Disputes Redressal Commission and remit the matter to the National Commission to decide the Revision Petition on merit.
This appeal is accordingly allowed.
5. Basic facts are not in dispute, i.e., petitioner had applied for a plot and he was allotted a plot by the respondent vide allotment letter dated 5.4.1989. The agreement entered between the parties is also not in dispute. It is also not in dispute that in response to a request by the petitioner, the respondent vide their letter dated 23.6.1994 indicated the balance amount payable by the petitioner/complainant, which was paid by him on 13.9.1994. On behalf of the petitioner the matter was also taken-up by Consumer Consultancy Service, which was replied to by the respondent CDA, vide their letter dated 6.8.1996, which reads as under:
Sub : CDA - Jawaharnagar Housing Colony - Plot No. A : 111 - non-execution of Sale Deed- complaint-reg-
Ref.: 1. Agreement dated 7.5.1990 between the CDA and Mr. K.V. Padmanabhan.
2. Application dated : 14.6.1994 of Shri K.V. Padmanabhan.
3. Your letter No. 483/KVP/96/ 163 dated 8.6.1996.
4. This office letter of even number dated : 6.7.1996.
5. Your letter No. KVP/483/96/ 133 dated : 8.7.1996.
With reference to your letter 5th cited I am to inform you that the question of demanding an additional agreement from Mr. K.V. Padmanabhan, allottee of Jawahar Nagar Housing Colony before issuing title deeds, will be placed before the newly constituted Executive Committee of Calicut Development Authority for its consideration and appropriate decision. The decision thereon will be intimated to you shortly.
6. It is the case of the learned Counsel for the complainant that keeping in view the terms of the brochure especially Condition 4(d), the respondent could not have denied him the opportunity of getting the Sale-Deed registered in his name. It is also pointed out by the learned Counsel for the petitioner that nowhere in the allotment letter the price has been mentioned as 'tentative'. There is no such word, i.e., 'tentative', appearing in the letter of allotment. He further wishes to state, as per agreement entered between the parties, the respondent is prohibited from passing on the enhanced cost of land on account of indemnity provided by the petitioner under Sub-clause 3 of the 'Covenant', which reads as under:
The Authority hereby agrees to keep and hold the allottee saved and effectually indemnified against all risks, cost, claims and damages whatsoever in respect of the plot allotted to him/her, due to any defect in the title of the property held by the Authority.
7. On the other hand, learned Counsel for the respondent wishes to rely upon the Clause 10 of the agreement, according to which the allotment was subject to the conditions contained in the regulations and Clause K of the regulation empowers them to change the conditions. Clause K of the Regulations reads as follows:
The authority is at liberty to alter any of the conditions or to add any conditions. If ambiguity arises the interpretation of the authority shall be final.
8. It was also argued by her that since this is a public authority, and such they were directed to pay additional compensation on account of land acquisition, in this situation, they were obliged to pass it on to the land purchasers, which has been accepted by many others, hence they were perfectly justified in asking for signing of additional agreement which was made clear vide their letter dated 21.4.1999.
9. After hearing the learned Counsel for both the parties at great length and perusal of material on record, we find that there is no dispute that 'Brochure' was issued with regard to Jawahar Nagar Housing Colony. Condition 4(d) of this brochure (page 72 of the paper-book) reads as follows:
Allottees are at liberty to remit more than one instalment at a time or can remit in lump sum and get the sale deed registered in his/her name.
10. There is no disputing the fact that the petitioner in consultation with the respondent had deposited the total amount on 13.9.1994. As per Clause (d) reproduced earlier, the petitioner would have become entitled to the registration of sale-deed in the year 1994 itself. Failure to do so, is a clear case of deficiency in service.
11. This has been severally held by this Commissions, that in order to appreciate the cases related to real-estate/housing, a harmonious reading is required to be made of the 'brochure', 'agreement' and 'other regulations'. We have no quarrel with the reading of Clause 10 of the agreement but when we also see that at the end of all this the respondent CDA, enters into a 'Covenant' with the allottee, insulating and indemnifying him from any future cost-liabilities, hence we cannot burden the petitioner with the liability proposed to be fastened on the petitioner. As per Stroud's Dictionary 5th Edition the word "Covenant" means, "an agreement by deed between two or more persons to do one or more thing or things, or to do, or give, or to prevent, or refrain from somewhat; and it is either (1) a covenant in law implied from the terms employed, or (2) a covenant in fact, i.e., that which is expressly agreed between parties".
12. In view of this understanding the word 'Covenant' and in view of this provision, i.e., Clause 3 of the 'Covenant' we are afraid that the respondent is restrained, by a mutual agreement, in terms of the 'Covenant' to pass on any cost, claim or damages in respect of the plot allotted, in view of this indemnification, which in our view though appearing in the same document/Agreement, yet shall be taken to be independent of this agreement. We hold this to be a separate 'Covenant'. Even though Sub-clause (i) of the Covenant is subject to stipulations contained herein before, but there is no such condition attached to the Clause of indemnification of the allottee, hence it has to be read independently. At worst the Clause 10 while may protect the interest of the respondent, but they voluntarily and on their own volition enters into a 'Covenant' indemnifying the allottee. Even taking this to be at best, an ambiguity, even though we are not convinced of it, yet as per settled law, the benefit of any ambiguity or contradiction must go in favour of the plaintiff, in this case, the consumer/ petitioner.
13. In this view of the matter we are further strengthened, when we see the cross-examination of the Section Officer, CDA, whose affidavit had been filed before the District Forum, which reads as under:
Q 1. Is there any mention in Exh. P4 agreement that the price fixed in Clause (6) is tentative?
A. No. Q 2. Is the price fixed in Clause (6) final price?
A. It was the final price fixed at the time of the allotment.
Q 3. It is mentioned in Exhibit P4 that once full payment is made, title will be issued?
A. It is mentioned that once the condition is satisfied title will be issued.
In exhibit P1 Brochure it is mentioned that once the payment is made in full, title deed will be issued, payment can be made in lump sum or in instalments.
Q4. Which condition in the agreement empowers you to say that you are not duty bound to execute title deed before 10.5.2000.
A. It is as per Clause (2) of Exhibit P4. Witness adds what is stated in Clause (2) is regarding payment in instalments. If paid in full earlier one need not wait till 2000, and title deed should be executed immediately.
Q5. As per which condition in the agreement, you have asked the complainant to execute additional agreement?
A. It is not as per the condition in the agreement but as per the condition of Exhibit P1 Brochure.
Q6. Which condition enable you to seek additional agreement?
A. (K).
(Emphasis supplied)
14. This cross-examination from the respondent side makes the case of the respondent fall like nine pins. The least we expect from a public servant is statement of truth when he swears the affidavit. In his affidavit Savio George, Section Officer of respondent CDA in para 5 states as under:
There is no right conferred upon the complainant as per Exh. P1 Brochure or Ext. P4 agreement to get the sale deed before the period stipulated in agreement, viz., 10.5.2000. Only liberty to deposit the amount payable together, instead on instalments, and waiving the future interest is given. That does not create any right for the complainant to require demand or any obligation on the side of the opposite party to give the sale deed without an additional agreement being executed as per the policy, procedure, practice and norms of the opposite party.
(Emphasis supplied)
15. This part of the affidavit is on the face of it contradictory to Clause (d) of the brochure which has already been reproduced earlier and affirmed by the same deponent in his cross-examination reproduced earlier. We will not like to proceed against the deponent for making an incorrect statement but Public Authority need to be very careful while swearing an affidavit.
16. We are also somewhat intrigued to read in the written version (Para 7) filed by the respondent before the District Forum that in such cases, of premature remittance the usual procedure and practice adopted and followed by the opposite party is that before the execution of sale-deed an additional agreement has to be executed... (Emphasis supplied). To say the least, we do not expect such a statement from a public authority, which is charged with the responsibility of public welfare. We also fail to understand as to how the terms of brochure or agreement can be superseded by an unwritten and unsubstantiated so-called 'procedure and practice'?
17. We have very carefully gone through the order of the State Commission which has written almost about more than 20 pages on the question of signing of the additional agreement. In the aforementioned circumstances, we are of the view that the respondent could not have asked the petitioner to sign the additional agreement. In fact, the deficiency starts from 1994 onwards when as per condition 4(d) of the brochure and also of the regulation, the respondent should have executed the sale-deed after receiving the full amount from the petitioner.
18. Hon'ble Supreme Court had occasion to deal with such a case in the case of Ghaziabad Development Authority v. Union of India and Ors. II (2000) CPI (SC) : AIR 2000 SC 2003, in which it had held, "when a development authority announces a scheme of plot, the brochure issued by it for public information is a notification to offer".
19. This Commission had occasion to go into the same question in the case of Narender Pal Singh v. Meerut Development Authority III (2002) CPJ 34 (NC), where it was held that in the absence of anything to the contrary, presumption in these circumstances, what is being asked is the final price. In the instant case before us also we see that, in the allotment letter there is no reference to word 'tentative' or any word to that effect. Similar view was also held by this Commission in the case of Ghaziabad Development Authority v. Vishnu Datt Dimri II (2002) CPJ 380 (NC) : 2003 CCJ 1233, where it was held, when under the scheme there was no provision for escalation of cost, the public authority could not have demanded the cost escalation.
20. Be that as it may, as already discussed earlier, firstly that as per the terms of the allotment especially, the "Covenant" the petitioner stood insulated/indemnified against any cost increase. It is also not in dispute that the petitioner in consultation with the respondent had deposited the full amount after which as per the terms of brochure and conditions, he was entitled for registration of sale-deed in his favour. This action having been completed in 1994 and not executing sale-deed itself is a case of deficiency in service on the part of the respondent. The letter for signing an additional agreement was issued only in 1999, even though there is a reference to this in their letter dated 6.8.1996 addressed to the Consumer Consultation Services. We are unable to appreciate as to what was the respondent doing between 13.9.1994 and 6.8.1996?
21. In the aforementioned circumstances, we see that the deficiency is writ large on the part of the respondent, both in law and fact. Our view of respondent being deficient is further strengthened when we see the cross-examination of the deponent of the respondent. In the aforementioned circumstances, we are unable to sustain the order of the State Commission which is set aside. The order passed by the District Forum is restored. The revision petition is allowed and the respondent is directed to execute the sale-deed and register it within a period of 6 weeks from this order.
22. The petitioner shall also be entitled to the cost of Rs. 5,000 payable by the respondent CDA.