The instant complaint under Section 17 of the Consumer Protection Act, 1986 (for brevity, “the Act”) is at the instance of a couple/ purchasers against the developer/builder on the allegation of deficiency in services on the part of developer in a consumer dispute of housing construction.
Succinctly put, complainants’ case is that on 26.09.2011 they have applied for an apartment being NRC004 located on 4th floor in Tower-C having super built up area of 1722 sq. ft. along with a car parking space in the basement being NUC017 at Plot No.III-E/5, Action Area-III, New Town, Kolkata – 700135, Dist-North 24 Parganas on payment of application money of Rs.3,07,725/- through a cheque. Subsequently, on 09.11.2012 an Apartment Allotment Agreement (in short, Agreement) was executed in respect of the above mentioned apartment and car parking space at a total consideration of Rs.61,47,850/-. The complainants have stated that they have paid Rs.65,21,558/-. However, they were shocked and surprised on receipt of notice of possession with statement of accounts dated 30.11.2013 wherein the opposite party claimed cost of increase in super built up area amounting to Rs.4,21,275/-, pro-rata charges for arranging electrical energy at Rs.1,22,102/-, other costs including government charges at Rs.2,90,606/-, club charges of Rs.30,000/-, charges for reticulated gas connection of Rs.20,938/-, service taxes of Rs.83,273/- etc. The complainants have stated that the OP insisted on the payment as per their demand in the statement of account dated 30.11.2013. The complainants compelled to pay the same and on payment possession was delivered on 10.03.2014. The complainants have also stated that they have paid last payment on 10.02.2014 but the Deed of Conveyance was registered on 23.04.2015 for which they had to incur an expenses of Rs.67,780/- for delayed registration. Hence, the complainants have come up in this Commission against the OP/developer with prayer for several reliefs, viz. – (a) refund of Rs.4,21,275/- realised on the pretext of additional super built up area; (b) refund of Rs.60,000/- towards club charges; (c) refund of Rs.20,000/- realised for gas connection; (d) refund Rs.2,90,606/- realised as other costs including government charges; (e) refund Rs.1,22,102/- realised as pro-rata electric charges; (f) refund of Rs.67,680/- for delayed registration; (g) refund of Rs.1,01,438/- realised towards VAT recovery (h) alternatively to refund Rs.65,21,558/- along with interest @ 10% p.a.; (i) Rs.5,00,000/- for indulging in unfair trade practices; (j) Rs.5,00,000/- as compensation for harassment and mental agony etc.
The Opposite Party by filing a written version resisted the allegation made by the complainants and has stated that the complaint is not maintainable as this Commission does not have jurisdiction where both the parties agreed to settle the dispute amicably or to refer the matter to arbitration or the Courts of Kolkata alone and the Hon’ble High Court at Calcutta alone shall have the jurisdiction. The OP has submitted that the complainants have miserably failed to point out any deficiency in services provided by them and they have acted only in accordance with the agreement and the demands were made vide letter dated 30.11.2013 was in accordance with the terms and conditions of the agreement and as such the complaint should be dismissed.
During hearing of the case, both the parties have tendered evidence through affidavit. They have also given reply against the questionnaire set forth by their adversaries. The parties have relied upon several documents annexed with the evidence on affidavit filed by them. At the time of final hearing, complainants have filed Brief Notes of Arguments. However, OP abstained themselves from filing any brief notes of arguments.
At the outset, it would be pertinent to record that the value of the subject flat including the car parking space agreed upon by the parties was settled at Rs.61,47,850/-. The complainants have claimed compensation of Rs.5,00,000/- and therefore, in accordance with Section 17(1) of the Act, the claim of the complainants falls within the pecuniary limit of this Commission as per provision of Section 17(1) of the Act. The Office of OP /builder is well within the geographical limit of this Commission in accordance with Section 17(2) of the Act. Further, the subject matter of the dispute relating to ‘housing construction’ and when the complainants have alleged deficiency in services in accordance with the definition of Section 2(1)(o), this Commission has alone the jurisdiction to adjudicate the complaint.
Undisputedly, on 09.11.2012 an Apartment Allotment agreement in respect of an apartment vide no.NRC044 with the accommodation for parking space NUC017 at “New Town Heights” lying and situated at Plot No. III-E/5, Action Area – III, New Town, P. S. – New Town, Kolkata – 700135, District – North 24 Parganas was executed in between the parties. It was agreed that OP will sell the apartment having a super built up area of approximately 1722 sq.ft. along with a car parking space including the common areas and facilities and undivided proportionate share and interest in the said building on the terms and conditions stipulated therein at a total consideration of Rs. 61,47,850/-. It may be pertinent to record that the OP could obtain final sanction of building plan from the New Town Kolkata Development Authority (NKDA) on 07.03.2011.
It is not in dispute that on 30.11.2013 OP issued notice of possession along with final statement of account where OP claimed Rs.4,21,275/- as cost of increase of area, balance amount of Rs. 30,000/- as club charges , Rs. 1,22,102/- as pro-rata charges for arranging supply of electrical energy @ 66.13 paise per sq.ft. excluding security deposit, Rs.20,938/- as pro-rata charges of reticulated gas connection, Rs.2,90,606/- as other costs including government charges, Rs.83,273/- as service taxes etc. besides a claim of Rs. 5,53,478/- as stamp duty and registration charges.
The fact remains that the complainants had paid the entire consideration amount. Needless to say, the parties are bound by the agreement. A person who signs a document contain certain contractual terms is normally bound by them even though he is ignorant of their precise legal effect. In a decision reported in AIR 1996 SC 2508( Bharati Knitting Company –vs. – DHL Worldwide Express Courier Division of Airfreight Ltd. ) the Hon’ble Supreme Court has observed thus :
“It is seen that when a person signs a document which contains certain contractual terms, as rightly pointed out by Mr. R.F.Nariman, Ld. Senior Counsel, that normally parties are bound by such contract; 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 National Commission could go behind the terms of the contract? It is true, as contended by Mr. M.N.Krishanmani, 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 it 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 between the parties. But when there is a specific term in the contract, the parties are bound by the terms in the contract”
Keeping in view the proposition of law laid down by the Highest Court of the Land, let us consider the relevant terms and conditions of the agreement. Clause - 10.1 relates to schedule of possession of the apartment, which re-writes below :-
“ The company, based on its present plans and estimates, con template to offer possession of the said apartment to the apartment allottee within a period of 3 years from the date of execution of this agreement or approval of the building plans whichever is later, unless there shall be delay or failure due to Force Majeure conditions and reasons mentioned in clauses 11.1, 11.2 and 11.3 or due to failure of apartment allottee (s) to pay in time the total price and other charges and dues/payments mentioned in this agreement or any failure on the part of the apartment allotees (s) to abide all or any of the terms or conditions of this Agreement.”
Clause 10.2 of the agreement relates to procedure for taking possession, which provides –
“ The company shall offer in writing the possession of the said apartment to the apartment allottee according to the terms of this Agreement ( the Notice of Possession ) to be taken over 30 days from the date of issue of such notice and the Company shall give possession of the Said Apartment to the Apartment Allottee provided the Apartment Allottee is not in default of any of the terms and conditions of this agreement and has complied with all provisions, formalities, documentation etc as may be prescribed by the Company in this regard.
The Apartment Allottee shall be liable to pay the Maintenance Charge on and from the date on which actual physical possession is taken or, on the expiry of thirty (30) days from the date of issuance of the Notice of Possession, whichever is earlier “.
The evidence on record clearly suggests that as per agreement, the OP was under obligation to handover the subject flat/apartment to the complainants positively by 09.11.2015. Evidently, the OP has delivered possession of the apartment on 10.03.2014 though partial occupancy certificate was obtained from New Town Kolkata Development Authority (NKDA). Subsequently, on 17.04.2015 a Deed of Conveyance has also been executed in favour of the complainants.
Admittedly, on 30.11.2013 the notice of possession was issued by OP with a statement of accounts to make payment of a huge amount as recorded above. Now, we shall deal with the allegation of deficiency in services point wise as levelled by the complainant -
- Increase in super built up area
In the final statement of accounts, the OP has claimed Rs. 4,21,275/- as cost of increased area. Ld. Advocate for the complainants has submitted that under Clauses 1.7 & 1.8 of the Agreement, the super area is treated ‘tentative’ against an increase or decrease of which the complainants had no right to protest. Further there is nothing in the agreement which gives a reasonable highlight as to under what circumstances the super built up area be either increased or decreased.
It has come to notice that there were altogether sanctioned building plan for nine towers but OP has constructed another two towers subsequently being AA & JJ meaning thereby in place of nine towers in the project, the OP has constructed 11 towers in the said project. According to OP, the West Bengal State Electricity Board (WBSEB) sanctioned the revised electrical scheme for which the OP had to introduce additional sub-stations and electrical equipment in the basement of each tower and hence it increased the built up area of main sub-station building. This was redistributed to all towers and hence, there was an alleged increased in super built up area in some towers and reduction in some towers.
It could not be understood if additional area is built and on the basis of the same, alleged super built up area is increased due to alleged installation of additional electric sub-station, then how can super built up are be decreased in some towers in the complex instead of increase of super area in proportionate basis for all towers. When two additional towers being AA & JJ were constructed by a surprise, the common facilities and areas will certainly be shared by more number of apartment owners and it could not be understood how the super area of the apartment can increase.
Moreover, the Clause 9.2 does not authorise the OP to claim amount from the purchasers without giving them prior information regarding increase of area. It appears that the final building plan was sanctioned on 07.03.2011 by NKDA and as the OP is not producing the revised scheme of WBSEB, therefore, an adverse inference should be drawn against the OP.
Therefore, the claim of OP on account of cost of increased area amounting to Rs.4,21,275/- appears to be illusory and as such the OP should not have realised the said amount from the complainants.
- Pro-rata charges for arranging supply of electrical energy @ 66.18P per sq. ft.
The OP has claimed a sum of Rs.1,22,102/- @ 66.18 per sq. ft. on account of pro-rata charges for arranging supply of electrical energy for converting 33 KV power to 1 KV power for which transformers, panels (high tension and low tension) special relay control etc.
Serial Nos.18 & 19 of Part A to Annexure –IV to the Agreement provides “common areas a facilities includes electrical sub-station/transformer/electrical panel/electrical LT Panel Room and as such are included in computation of super built up area in the agreement. The claim made by the OP was totally illegal and beyond the agreed terms and conditions in as much as for the self-same service OP has charged twice. To make any apartment in a habitable condition – water, drainage and electricity is a must at the time of selling the apartment. The OP/developer was well aware that they have to make minimum infrastructure for electricity and the same was included in the super built up area. The cost of electric meter installation and security deposit is directly paid by the complainant to Electricity Supply Company. Therefore, it is palpably clear that the OP had no authority to claim an amount of Rs.1,22,102/- as pro-rata charges for arranging electric energy when they could not account for the same.
Therefore, when OP has done nothing except the basic infrastructure which is included in the super built up area, the claim of OP on account of pro-rata charges for installation of electricity to the tune of Rs.1,22,102/- was totally untenable.
- Other costs including Government charges –
The final statement of accounts indicates that the OP has claimed Rs.2,90,606/- as other costs including government charges @ Rs.157.51P per sq. ft. In their written version, the OP has not explained anything to that effect.
The fact remains that the OP has not given any explanation of such charges. The OP was under obligation to give account to the complainants about payment of their hard earned money on account of payment of costs including government charges. Moreover, by term ‘other costs’ the OP has not explained which costs will be treated as other costs and whether really OP was liable to pay the same in the respective accounts of Tax Department of the government or not. In absence of any explanation or documents in this regard, the claim of OP on this score also cannot be accepted. In fact, OP had nothing to substantiate and such demand was made taking the advantage of the fact that already the entire consideration has been paid and the complainants had no option but to pay the illegitimate demand to take the possession of the apartment.
Accordingly, OP was not entitled to any amount on account of other costs or government charges.
- PRO-RATA Charges of Reticulated Gas Connection:-
The Opposite Party has collected Rs,20,938/- as pro-rata charges of reticulated gas connection (excluding security deposit). Despite payment of gas installation charges to OP, the OP has failed to install the same till date causing tremendous agony and harassment of the complainants besides losing substantial amount of interest on the amount already paid. The OP is admitted the same while replying to the questionnaire No.25(f) of the complainants.
Therefore, the complainants are also entitled to refund of amount of Rs.20,938/- from the OP on that head.
So far as claim of the complainants in Prayer Clause-B of the petition of complaint, where they claimed refund of club charges of Rs.60,000/-, I am of the view that since the complainants did not seek any permission in accordance with Section 12(1)(c) of the Act to file the complaint in a representative capacity to initiate a ‘class action’, in view of decision of Larger Bench of Hon’ble National Commission reported in I (2017) CPJ 1 [Ambrish Kr. Shukla & 21 Ors. – Vs. – Ferrous Infrastructure Pvt. Ltd.] the complainants are not entitled to any relief on that score. Equally, the complainants cannot claim refund of the amount of Rs.83,273/- claimed by OP as service taxes as per statement of account dated 30.11.2013.
In their written version, the OP took a plea of referring the matter to Arbitral Tribunal as there is an arbitration Clause in the Agreement. in the written version referring to a decision of a Single Bench of Hon’ble Calcutta High Court in the case reported in (2013) 1 CAL L T 546 [Sudarshan Vyapar vt. Ltd. & Anr. - vs. - Madhusudan Guha] it was urged to refer to the dispute to the Arbitrator.
In the case of DLF Ltd. - vs. - Mridul Estate Pvt. Ltd. reported in III (2013) CPJ 439 the Larger Bench of Hon’ble National Consumer Commission considering several decisions of Hon’ble Supreme Court reported in – (1) the case of SBP & Co - vs.- M/s. Patel Engineering Company Ltd. & Anr., AIR 2006 SC 450; (2) National Seeds Corporation Ltd. - vs. - M. Madhusudan Reddy & Anr., I (2012) CPJ 1 (SC); (3) Lucknow Development Authority - vs. - M.K. Gupta, III (1993) CPJ 7 (SC) and several other judgements has observed that the Consumer Fora constituted under the C.P. Act are not bound to refer the dispute raised in the complaint on an application filed under Section 8 of the 1996 Act seeking reference of the dispute to an Arbitral Tribunal in terms of valid arbitration clause in the agreement entered into between the parties. The OP in CC/188 of 2010 preferred an appeal in the Hon’ble Supreme Court and the Hon’ble Supreme Court in the case of Rosedale Developers Pvt. Ltd. - vs. - Aghore Bhattacharya reported in (2015) 1 WBLR (SC) 385 has held that the National Commission did not commit any error by holding that the remedy of arbitration available to the complainant does not bar the jurisdiction of the Consumer Fora and the Consumer Fora are not under an obligation to refer the matter to the Arbitral Tribunal.
After amendment to Section 8 of Arbitration Act, 2015 a bunch of applications filed by the developers/builders and in disposing of the same by the Larger Bench of the Hon’ble National Commission reported in III (2017) CPJ 270 (Aftab Singh - vs. - EMAAR MGF Land Ltd. & Anr.) has observed that in the context of consumer jurisprudence, the Hon’ble Supreme Court has not disturbed the earlier opinion regarding the arbitrarily of consumer disputes rendered in the pre-amendment era rather it has affirmed the protection granted to the consumers from private resolution. After a detailed discussion with reference to several judgement of the Hon’ble Supreme Court including the decision reported in (2016) 10 SCC 386 (A. Ayyasamy - vs. - A. Paramasivam & Ors.) the Hon’ble National Commission has arrived at the conclusion that in light of overall architecture of the Consumer Act and Court - evolved jurisprudence, amended Sub Section (1) of Section 8 cannot be construed as a mandate to the Consumer Forums, constituted under the Act, to refer the parties to arbitration in terms of the arbitration agreement. Consequently, the Hon’ble National Commission reject the arguments on behalf of the builder and hold up that an arbitration clause between the complainant and the builder cannot circumscribe the jurisdiction of a Consumer Forum, notwithstanding the amendments made to Section 8 of the 1996 Act.
On evaluation of materials on record, it transpires that the complainants being ‘consumer’ as defined in Section 2(1)(d) of the Act hired the services of OP on consideration and despite receipt of entire consideration amount, taking advantage of the situation, OP has realised additional amount by serving notice dated 30.11.2013 with a threat not to deliver possession unless the demands are fulfilled and thereby deficient in rendering services towards the complainants within the meaning of Section 2(1)(g) read with Section 2(1)(o) of the Act. Therefore, the complainants are entitled to some reliefs. In my view, direction upon the OP to refund Rs.4,21,275/- as cost of increased area, Rs.1,22,102/- as pro-rata charges for arranging supply of electrical energy, Rs.20,938/- as pro-rata charges for reticulated gas connection, Rs.2,90,606/- as other costs including government charges will mitigate the grievances of complainants.
Last but not the least, the complainants are also entitled to refund the amount for causing delay in registration. The complainants have specifically stated that they have made last payment on 10.02.2014. Thereafter, on 10.03.2014 the possession was delivered to them. However, registration of the flat was done on 23.04.2015 after a long delay of more than 14 months. Therefore, the claim of the complainants for refund of Rs.67,680/- for delayed registration appear to be justified because a developer has no authority to invest the amount for the purpose of their business after collecting the same from a buyer and the conduct of the developer clearly postulates that they have enjoyed the amount of registration for about 14 months for the purpose of their business and as such they should refund the same.
Besides the same, the complainants are entitled to compensation for the harassment and mental agony suffered by them. However, taking into consideration of the fact that the complainants are in possession of the apartment since 10.03.2014, considering the loss suffered by them, I assess the compensation to the tune of Rs.1,00,000/-. As the situation compelled the complainants to lodge complaint, they are also entitled to litigation cost which I quantify at Rs.10,000/-. However, as I do not find any substantial evidence against the OP with regard to adopting unfair trade practice, I do not award any amount on that head.
In view of the discussion above, the complaint is allowed on contest with the following directions:-
- The Opposite Party is directed to refund (a) cost of increased area – Rs.4,21,275/-, (b) pro-rata charges for arranging supply of electrical energy – Rs.1,22,102/-, (c) pro-rata charges of reticulated gas connection – Rs.20,938/-, (d) other charges including government charges – Rs.2,90,606/-, (e) delayed registration – Rs.67,680/- aggregating Rs.9,22,601/- along with interest thereon @ 10% p.a. from the date of payments till its realisation;
- The Opposite Party is directed to pay compensation of Rs.1,00,000/- in favour of the complainants;
- The Opposite Party shall pay a sum of 10,000/- as cost of litigation to the complainants;
- The above payments must be paid within 60 days from date.
