BY BINOY KUMAR, MEMBER

1.       The Present batch of Appeals and Cross Appeals have been filed under Section 19 of the Consumer Protection Act, 1986 (For short “the Act”) assailing the Order dated 21.10.2019 passed by the State Consumer Disputes Redressal Commission, West Bengal at Kolkata (hereinafter referred to as the ‘State Commission’) in Complaint Case No.CC/328/2016 & Ors., whereby the Complaints filed by the Complainants against the Respondent-1/Complainant-1 was allowed.  Since, both the batch of Appeals are Cross Appeals have been filed against the same order of the State Commission, the same is disposed of in a single Order.  For convenience, we will consider the First Appeal No.45 of 2020 filed by Sh. Debashish Mitra (Hereinafter referred to as the Complainant No.1/Respondent No.1) against Central Government Employees Welfare Housing Organization (CGEWHO) [hereinafter referred to as the Opposite Party 1] and M/s PS Group Realty Pvt. Ltd. (hereinafter referred to as the Opposite Party 2).

2.       The brief facts of the case as narrated in the Complaint before the State Commission are as follows :

(a) Pursuant to an advertisement for construction of a project named Kolkata (phase- II) Housing Scheme at Belgharia Expressway lying and situated at Badra (North) Main Road, Shaktigarh, Birati, Kolkata- 700051, Dist.- North 24 Parganas within local limits of North Dum Dum Municipality, complainant after fulfilment of eligibility criteria applied for allotment of one dwelling unit in the said project. On receiving the said application of the complainant, on 29.11.2010 an allotment letter of one such dwelling unit was issued by the Opposite Party No. 1 in favour of the complainant along with the payment schedule. The Opposite Party No. 1, who is not in construction activity, engages OP No. 2 for the purpose of development and construction of the 690 dwelling units to be built up in the said project. Accordingly, OP No. 1 entered into an agreement with the Opposite Party No. 2 on 03.06.2011 for construction of Trunkey Housing Project. The tentative cost of different type of dwelling units of project was mentioned in the ‘Sale Brochure of Kolkata phase-II housing scheme- 2010’ and as per Sale Brochure the tentative cost of type- A, type-B, type- C, type-D dwelling units were fixed at Rs.15.12 lakhs , Rs.27.25 lakhs, Rs.33.19 lakhs and Rs.39.08 lakhs respectively and the costs, indicated towards different types of dwelling units are including anticipated escalation payable till March, 2013 on the basis of price index, tentatively taken at 3% per year. The complainant was served a notice for payment of first instalment before 31.01.2011 whereby the tentative cost of the said unit was fixed at Rs.39,08,000/-. The complainant has stated that he has paid the full consideration on diverse dates. However, he was shocked to receive ‘final call up letter’ which was issued by the Director (Finance) of CGEWHO on 24.11.2014 whereby the complainant was forced to make the 6^th and final instalment of Rs.10,27,037/- including the cost of parking under stilt area.

(b) The complainant has alleged that as per terms of the agreement the construction should commence tentatively in October, 2010 and should have been completed within 30 months thereafter. However, the construction work of the said housing scheme was started only in the month of June, 2011 and the construction work is considered not yet completed as the Completion Certificate is yet to be issued by the competent authority. Anyhow, handing over the dwelling units was initiated from 31.12.2014 after a delay of 1 year 9 months from the date of completion of the project as per the Sale Brochure of the housing scheme. The complainant has stated that the Occupancy Certificate has been issued by the North Dum Dum Municipality on 09.10.2014 and the same was uploaded on the website of CGEWHO on 1.12.2014. The complainant has also alleged that after getting physical possession of the dwelling units they started noticing that there was gross irregularity in imposing additional cost arbitrary causing pecuniary loss to the complainant. The complainant has further alleged that the anticipated increase of 13.62% on account of escalation on announced cost was initially disclosed by the OP No. 1 in the pre-final cost calculation statement uploaded on the website of CGEWHO on 5.5.2014 along with the minutes of PMC meeting held on 30.04.2014. By uploading the pre-final cost calculation statement on 05.05.2014, the cost per sq. ft. super built up area of dwelling unit (i.e. Rs.2595/- + service tax at 3%) was brought to the notice of the allottees/ owners. In the same statement , the cost per sq. ft super built up area of dwelling unit as per announced cost of the dwelling unit was depicted as Rs.2284/- to show 13.62% shock escalation.

(c) Thus CGEWHO has tried to mislead the allottees including the complainant by showing lesser figure of escalation knowing that the announced cost was including anticipatory escalation @ 3% per year till March 2013. The complainant has also stated that the OP No. 1 has misappropriated a large amount in the project cost towards service tax amounting to Rs.6,30,92,273/- and also wrongfully usurped the amount of Rs.3,51,96,513/- towards reserve fund for their personal benefit etc.

(d) The complainant has further alleged that the amount of materials and labour escalation was also calculated by the OP No. 1 is excessive one than the original cost etc. The complainant submits that the OP No. 1 have misappropriated the fund amounting to several lacks rupees towards cancellation charges since no such amount towards withdrawal and cancellation charges has been reflected in the pre-final cost calculation uploaded on the website of CGEWHO on 05.02.2015. Hence, the Opposite Party is deficient in service and liable for unfair trade practice when it fails to complete the project in time as per the Sale Brochure. The project was to be completed by OP No. 1 within 30 months from the date of construction which was tentatively in the month of October, 2010 but the project could not be completed within the stipulated time. The complainant has specifically stated that the OP No.1 has collected       Rs.2,75,000/- from about 449 allottees for allotment of parking spaces under stilt area though the same is clearly not permissible after the decision of the Hon’ble Supreme Court of India in Civil appeal No. 2544 of 2010 dated 31.8.2010. The complainant has stated that he sent a notice through speed post upon the Opposite Party No. 1 on 10.3.2016 but the Opposite Party No. 1 did not give any reply to the same.

(e) Hence, the complainant approached the State Commission with the prayer for following reliefs :

(i) Execution and registration of a proper deed of conveyance in favour of the complainant in respect of the scheduled  flat, along with all common facilities and amenities as mentioned in the sale Brochure, on calculation of final cost price of the schedule flat adjusting/paying back the various refunds to which the complainant is entitled to as mentioned under various heads of the prayer below.

(ii) Computation and fixation of the final cost of the scheduled flat excluding the proportionate share in the total amount of Reserve Fund (Rs.3,51,96,513/-) already collected from 582 allottees including the complainant as stated under Para-13, which stands at Rs.72,752/-, is to be refunded by the Opposite Party- 1 to the complainant along with statutory interest on the same amount.

(iii) Computation and fixation of the final cost of scheduled flat excluding the proportionate share in the total amount of Service Tax (Rs.6,30,92,273/-) recovered from 582 allottees including the complainant, which stands at Rs.1,30,412/- which  is to be refunded by the Opposite Party- 1 to the complainant along with statutory interest on the same amount.

(iv) Computation and fixation of the final cost of scheduled flat excluding proportionate share in the total unspent amount towards the cost of land, conversion of use of land for residential purposes, survey, soil investigation etc. (Rs.16,06,67,322/-) recovered from 582 allottees including the complainant, which stands at Rs.3,32,101/- , which is to be refunded by the Opposite Party- 1 to the complainant along with statutory interest on the same amount.

(v) Computation and fixation of the final cost of scheduled flat excluding proportionate share in the Difference Cost of Cement and Steel (Rs.15,48,15,999/-) recovered from 582 allottees including the complainant as stated under Para-21, which stands at Rs.3,20,006/-, which is to be refunded by the Opposite Party- 1 to the complainant along with statutory interest on the same amount;

(vi) Computation and fixation of the final cost of scheduled flat excluding proportionate share in excess amount of Rs.32,52,52,531/- recovered towards Materials and Labour Escalation (i.e.Rs.59,34,89,157/- in place of Rs.26,82,36,626/- from 582 allottees including the complainant as stated under Para-22, which stands at      Rs.6,72,301/-, which is to be refunded by the Opposite Party- 1 to the complainant along with statutory interest on the same amount;

(vii) Refund of proportionate share in the unrecovered amount of Rs.10,27,35,270/- towards compensation for delay in completion of work/project by M/s. P S Group Reality Ltd. within the stipulated time, which stands at Rs.2,12,355/-, which is to be refunded by the Opposite Party- 1 to the complainant along with statutory interest on the same amount;

(viii) Computation and fixation of the final cost of schedule flat excluding the unadjusted amount of Equalisation, Withdrawal and Cancellation Charges recovered from the allottees after verification and the proportionate share of the same amount is to be refunded by the Opposite Party-1 to the complainant along with statutory interest on the same amount;

(ix) Payment of a sum of 2,00,000/- by the Opposite Party- 1 to the complainant towards compensation  for the delay of 21 months in completion of the project by the Opposite Party- 1 (i.e. CGEWHO) within the stipulated period of 30 months’ time from the date of commencement of construction as per the “Sale Brochure of Kolkata Phase-II Housing Scheme”.

(x) Payment of an amount of Rs.1,00,000/- by the Opposite Party-1 to the complainant towards compensation for the deficiencies observed in the Scheduled Flat in respect of difference in Super Built Area, materials and workmanships.

(xi) Delivery of the entire stilt area (i.e. common area) to the Executive Committee of KV-II AOA, Kolkata along with other common areas and facilities/ amenities.

(xii) Refund the entire amount Rs.2,75,000/- recovered from the complainant towards the cost of parking under ‘stilt area’ by the Opposite Party- 1 to the complainant along with statutory interest on the same amount.

(xiii) Completion of the deficiencies in services in common areas and facilities/amenities within a period of six months time.

(xiv) Delivery of the Notarized/Certified copies of the Completion and Occupancy Certificates, issued by the Competent Authority in respect of the Revised Approved Layout/ Building Plan No. 51 for the year 2012-13, by the Opposite Party- 1 to the complainant as stated under Para-24.

(xv) Compensation to the tune of Rs.2,50,000/- by the Opposite Party- 1 to the complainant for the mental and physical agony which are being suffering by the complainant for the last couple of years out of the aforesaid deficiency of service and unfair trade practice.

(xvi) Compensation to the tune of Rs.75,000/- to the complainant towards Litigation cost etc.

3.       The Opposite Party No.1 in its written version has averred that the Complaint is not maintainable.  It has been taken the plea that it undertakes social welfare housing scheme at no profit no loss basis for the Central Government Employees who cannot be categorized as Consumer within the definition under the Act. The averment of the Opposite Party in its written version is as follows :

              “The specific case of the OP No. 1 is that the allotment letter cum call up notice dated 29.1.2010 issued by them clearly provides the components of the 6^th and final instalment would include actual cost towards escalation, interest towards capitalization charges, apartments owners associations charges, reserved fund, service tax and other statutory levies/charges, if any, along with the cost of parking (s) if allotted. The OP No. 1 has stated that the complainant has never raised any objection as to any of the clause in the said allotment letter on the basis of which one type-D dwelling unit measuring about 1700 sq. ft. had been allotted in favour of the complainant and the complainant in terms of the said allotment letter had made payments. The OP No. 1 has stated that the parameters given in respect of dwelling units/flats has been mentioned in clause v of the part A of the CGEWHO Rules and the same are clearly provisional and is in the realm of the plan and proposal and a subject to the variation/variance in consonance with the actual project work being undertaken from time to time and also sanction of plan. The type-D flat to which the price was settled at Rs.39.08 lakhs tentatively included anticipatory escalation payable till March, 2013 on the basis of price index and which had been taken at a rate of 3% per annum and this payment was to be made good by the complainant by application money and five instalments thereafter as indicated clause vii of the CGEWHO rules. The 6^th and final instalment is supposed to comprise balance actual cost including escalation plus interest towards equalization charges plus reserved funds plus other statutory levies/charges plus apartment owners associations charges plus cost of parking if allotted. 

The OP No. 1 has categorically stated that the types, areas, costs as indicated are all tentative and subject to revision and cost indicated does not include actual cost and included the anticipated escalation cost payable only till March, 2013 on the basis of the rise in price index@ 3% per annum. The OP No. 1 has specifically stated that in terms of the final call up letter the complainant was supposed to pay Rs.10,27,037/- which the complainant paid without any demur or protest and as such the sole purpose of the complaint of making illegal profit. The OP No. 1 has stated that the cost of dwelling unit will be subject to escalation, on account of market prices, labour charges, cooperative society/apartment owners association charges, essential alterations, additions etc. and it was provided that all such revision of cost will be charged to the beneficiaries and they will be liable to pay the same.

The OP No. 1 has spelt out that the construction has started only on 01.09.2011 and the construction of the project was completed on 01.03.2014 and after completion of the works and upon fulfilment of all the statutory formalities the application for issuance of Occupancy Certificate was made by OP No. 1 to the competent authorities on 30.05.2014 and Occupancy Certificate had been issued by North Dum Dum Municipality on 09.10.2014. Accordingly, the communication of the completion of the project was informed to the beneficiaries/allottees including the complainant vide memo No. A-404/1 dated 24.11.2014 and the final call up notice had been issued. The OP No.1 has denied the allegation of misappropriation of any amount whatsoever under the head of reserve fund, service taxes etc. and further stated that as there is no deficiency of services on the part of them, the complaint should be dismissed.”

4.       The averment of the Opposite Party No.2 (M/s PS Group Realty Pvt. Ltd.) in its written version is as follows :

         “The Opposite Party No. 2 by filing a separate written version has stated that there is no privity of contract exist between them and the complainant and as such the compliant is bad for mis-joinder of party. The OP No. 2 has stated that the entire price of the flat has been paid by the complainant to OP No. 1 and no point of time any money has been paid by the complainant to OP No. 2 in any manner whatsoever and as such there is no fiduciary relationship between the complainant and OP No. 2 exists for which the compliant is not maintainable against them.”

5.       The State Commission passed the following Order which reads as under:  

               “In view of the above discussion, the complaint is allowed on contest against Opposite Party No. 1 in part and dismissed against Opposite Party No. 2 with the following directions:

          (i) The Opposite Party No. 1 is directed to execute and register the Deed of Conveyance in respect of the Unit/flat as per allotment letter dated 29.11.2010 and stilt car parking area (if any) within 60 days from date subject to payment of stamp duty and cost of registration etc. by the complainant;

          (ii) The Opposite Party No.1 is directed to pay Rs.20,000/- to the complainant as costs of litigation to be paid within 60 days from date. 

6.       Aggrieved by the Order dated 21.10.2019 of the State Commission, the Appellant/Complainant has filed this Appeal before this Commission with the following prayer in FA No.45 of 2020 :

(i)  the present Appeal under Section 19 read with Section 21 (a) (ii) and 21 (b) of the Consumer Protection Act, 1986 may kindly be admitted and allowed;

(ii) the judgement and order passed by the Hon’ble State Consumer Disputes Redressal Commission, West Bengal dated 21.10.2019 in Consumer Complaint No.CC/328/2016, may be kindly set aside;

(iii) the prayers of the Respondent/Complainant, made in the Consumer Complaint No.CC/328/2016 and submitted before the Hon’ble State Commission below, may kindly be granted by the Hon’ble National Commission, which may deem it, considering all materials on record submitted before the State Commission, and

(iv) any other relief may kindly be granted as this Hon’ble Commission may kindly deem fit, keeping in view of the facts and circumstances of the case and in the interest of justice.

          On the other hand, in the Cross Appeal in FA No.257 of 2020, the Appellant/Opposite Party has made the following prayer :

1. Set-aside/recall/waive/vacate the order dated 21.10.2019 passed by the Hon’ble State Commission, Delhi in CC No.330/2016;
2. Direct the Respondent to pay INR 1,00,000/- (Indian Rupees One Lakh Only) for the mental agony caused by the Respondent;
3. Direct the Respondent to pay INR 50,000/- (Indian Rupees Fifty Thousand only) for the litigation costs.
4. Pass such other and further orders in the interest of justice, as is deemed fit and proper in the facts and circumstances of the case.

7.       We have heard the arguments of the learned Counsel for both the Parties at great length and carefully perused the material on record.  The basic focus of the Appeal is on the issue of computation of costing for the flats done by the Respondent/Opposite Party No.1.  The Appellants/Complainants have also raised the issue of delay in handing over the possession of the respective units to the Complainants.

8.       The learned Counsel for Respondent/Opposite Party No.1 in his argument stressed on the fact that the Respondent No.1 is an Organisation under Govt. of India and has been set up on “no profit no loss basis” for providing housing to the Central Government Employees at different places.  Further, the delay in handing over the possession is only three months for reasons not within their control.  The State Commission could not find any negligence on the part of the Opposite Party No.1 in handing over the units during the scheduled period.

9.       Let us now carefully examine the issue of costing of the flats. The State Commission has not gone into the details of the costing.  The State Commission has cited the Order of this Commission in the matter of Jagdish Gurnani –vs- Lucknow Development Authority decided on 19.01.2010 (2010 SCC Online NCDRC 14 : [2010] NCDRC 14 : (2010) 1 CPJ 265 (NC) : (2010) 1 CPR 237 (NC) and accordingly not gone into the matter of pricing/costing.

10.     We have gone through the Order of this Commission (supra) wherein it was observed as follows :-

          “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 the this Commission in the case of “Himachal Pradesh Housing Board –vs- Surender Mohan Suneja [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 Hon’ble Supreme Court in the case of “Bareilly Development Authority –vs- Ajay Pal Singh [(1989) 2 SCC 116 : 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 Hon’ble Supreme Court in the case of “Premji Bhai Parmar –vs Delhi Development Authority [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.”

11.     Since, this is an Appeal, we are of the considered view that this Commission cannot go into the details of the costing done for the Project/flats by the Opposite Party.  Incidentally, this is an Organisation which follows the principle of a construction on “No profit no loss basis”.  Further, we do not find any merit on the issue of delay as it is only three months and to that extent, we do not want to issue any Orders on compensation for the limited delay that took place as submitted by the Opposite Party No.1.

12.     However, on account of the Complainants having raised the issue of costing, ends of justice will be met if the Ministry of Housing and Urban Affairs sets up a high level committee to look into the aspect of costing for this Project.  This Committee should specifically examine whether any extra fund has been charged or withheld with the Opposite Party and if any surplus fund is available, it should logically be returned to the Complainants at the earliest.

13.     In view of the foregoing discussion, we dispose of the First Appeal No.45 of 2020 alongwith all other connected Appeals and Cross Appeals by upholding the Order of the State Commission along with an additional direction to the Secretary, Ministry of Housing and Urban Affairs, Government of India to constitute a high level Committee under the Financial Advisor of the Ministry to look into the  various issues of costing of the Project as raised by the Complainants and satisfy itself whether the principle of no profit no loss has been strictly followed and if any excess amount has been collected from the Complainants, the same may be refunded to them within three months of this Order. 

14.     All pending Applications, if any, stand disposed of.