Date of final hearing – 05.04.2018

            The instant consumer complainant under Section 17  of the Consumer Protection Act, 1986 ( for brevity, “the Act” ) is at the instance of  intending purchasers against the developer/builder on the allegation of deficiency in services on the part of developer in respect of a flat/apartment being No.NRH074 along with a parking space being No. NUH029 in a Complex of OP named “New Town Heights” lying and situated at Plot No. III-E/5, Action Area – III, New Town, P. S. – New Town, Kolkata – 700156, District – North 24 Parganas in a  consumer dispute of housing construction.

          Succinctly put, complainants’ case is  that by a letter dated 18.01.2008 the abovementioned apartment and car parking space was allotted  to  the complainants upon payment of booking amount of Rs.3,00,000/-.  Subsequently, on 14.10.2008 an apartment allotment agreement was executed between the parties and agreed price of the subject property was fixed at Rs. 50,82,060/-. By a letter dated 09.04.2009 it was represented by OP that  the process of handing  over the apartment would begin during the 4^th quarter of  the financial year 2011 – 2012 i.e. during January to March,  2012 and it was admitted  that there was delay on the part of them.  The complainants have stated that he has already paid Rs.52,48,545/- out of total consideration as per revised plan dated 09.04.2009.  As per terms of the agreement, the OP was under obligation to hand over the apartment within 36 months i.e. 3 years from the date of execution of agreement.  The complainants state that he was shocked and surprised to receive a purported notice of demand date 20.05.2013 along with final statement of account from the opposite party where the OP raised false and frivolous claims under different heads from the complainants besides calling upon the complainants to execute the documents enclosed therewith with intend to cause further loss, injury and harassment beyond the scope of the said agreement.  The complainant has categorically stated that the illegality in the demands of the OP in their letter dated 20.05.2013 relating to cost of increase of super area for a sum of Rs. 1,77,930/-, pro-rata charges for arranging electrical energy  for a sum of Rs. 1,00,726/-, recovery of money in the name of other taxes and government charges etc. for a sum of Rs. 2,39,730/- etc. The complainants have alleged that the OP had from time to time compelled the complainants to execute various formatted letters and documents and thereby purporting to wash away its liabilities for the various misdeeds. The complainants submit that OP is not entitled to any payment on such account and till date the OP has neither obtained any final sanctioned plan for the subject complex nor has been issued the final fire safety and completion certificate.  The complainants have also stated that the question of OP offering any possession on making any demand does not and cannot arise.  Hence, the complainants have lodged the complaint with prayer for several reliefs, viz.- (a) a direction upon the OP to recall its letters being  dated 4.11.2013 and  04.04.2014 and  also refraining from giving effect or further effect and/or acting on the basis thereof and also from making any further demand for any sum of money from the complainants in any manner whatsoever; (b) an enquiry in the matter and a direction upon the OP to pay such compensation as may be found just and proper on such enquiry or causing mental agony, detention, undue harassment as a result of unfair trade practice adopted by OP; (c) direction upon OP to compensate the petitioner for the delay being caused in completion of the project in all respect and in handing over the possession of the apartment to the complainants complete in all respect with final sanctioned plan, completion certificate and final approval from Fire Safety Authorities etc.

          The Opposite Party by filing a written version 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 also stated that the complainants is under obligation to fulfil his part of the contract and as per terms of the agreement, OP offered possession to the complainants on 20.05.2013 on payment of the amounts outstanding as mentioned in the final statement of accounts.    The OP submits that they cannot be held responsible for the delay caused in handing over the apartment to the complainants. Since certain conditions described by OP though its letter depicts the picture that  work was delayed due to reasons beyond the control of the company and as there was no deficiency, the complaint should be dismissed with costs.

          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, both the parties have filed Brief Notes of Arguments in support of their respective cases.

          At the outset, it would be pertinent to record that the value of the subject flat agreed upon by the parties was settled at Rs.50,82,060/- and the complainants claimed interest over the said amount from the committed date of delivery of possession till the actual date of delivery of possession. Therefore, the claim of the complainants comes 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 is amenable before a Fora constituted under the Act and when  the complainant alleged deficiency  in services on the part of developer/builder, in accordance with the definition of Section 2(1)(o), this Commission has alone   the  jurisdiction to adjudicate the complaint.

          Undisputedly, on 18.01.2008 an allotment in respect of an apartment vide no.NRH074 along with parking space vide no. NUH029 at “New Town Heights” lying and situated at Plot No. III-E/5, Action Area – III, New Town, P. S. – New Town, Kolkata – 700156, District – North 24 Parganas was made in favour of the complainants.  It appears that on 14.10.2008 an Apartment Allotment Agreement was executed in between the parties. It was agreed that the OP will sell the apartment having a super built up area approximately 1468 sq. ft. including the common areas and facilities and undivided proportionate share and interest in the said building along with a parking space on the terms and conditions  stipulated therein at a total consideration of Rs. 50,82,060/-. It may be pertinent to record that the OP could obtain final sanction of building plan from New Town Kolkata Development Authority (NKDA) on 07.03.2011. However, by that time the OP had already collected Rs.52,48,545/- i.e. the amount in excess to the total consideration amount.

          The evidence on record indicates that from the very beginning of the transaction, the OP has adopted an unfair method in realising the amount from the intending purchasers. By a letter dated 09.04.2009 OP wrote to the complainants that they are about delivering within 36 months from the date of commencement of the project and as such they themselves amended clause 10.1 of the agreement to read as three years from the date of booking instead of three years from the date of signing of the agreement. However, it was assured that the process of handing over of possession will begin during the 4^th quarter of financial year 2011-2012 i.e. during January – March, 2012 period.

          In any case, it is not in dispute that on 20.05.2013 the OP issued notice of possession along with final statement of account where OP claimed Rs.1,77,930/- as cost of increase of area, balance amount of Rs. 30,000/- as club charges , Rs.1,00,726/- as pro-rata charges for arranging supply of electrical energy @ 66.18 paise per sq. ft. excluding security deposit, Rs. 20,938/- as pro-rata charges of reticulated gas connection, Rs.2,39,730/- as other costs including government charges at the rate of Rs.157.51P per sq. ft.,  Rs.5,363/- for delayed interest and Rs.63,506/- as service taxes etc. besides a claim of Rs. 4,07,478/- as stamp duty and registration charges. The fact remains that the complainant had paid the entire consideration amount. As per terms of the agreement, the OP was under obligation to deliver possession positively by 13.10.2011 i.e. expiry of three years from the date of Agreement.  However, only on 20.05.2013 the OP had issued notice of possession coupled with the final statement of accounts.  The said final statement of accounts is the genesis of this dispute.

           Needless to say, the parties are bound by the agreement. A person who signs a document contains 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 :

“....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 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, contemplate 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”.

          Clause No. 11.4 of the agreement deals with failure to deliver possession which provides if an apartment allottee is not found defaulter, compensation of Rs. 5/- per sq. ft. of the super area of the said apartment per month for the period of such delay beyond three (3) years or such extended periods is permitted under the agreement and the adjustment of such compensation shall be done only at the time conveyancing  the said apartment to the apartment allottee first named in this agreement and not earlier.

          The evidence on record clearly suggest  that as per agreement, the OP was under obligation to handover  the subject flat/apartment to the complainant positively by  13.10.2011 but  the OP has failed to keep  the promise and in fact only on 20.05.2013 the notice of possession was issued to the complainant . The OP has failed to advance any Force Majeure circumstances and failed to advance any tangible evidence on that count. Considering the same, in accordance with the terms of agreement, the OP is liable to pay compensation @ Rs. 5/- sq. ft. per month of the super built up area of complainant’s apartment.

          Now, we shall deal with the allegation of deficiency in services point wise as levelled by the complainant -

1. Increase in super built up area

          In the final statement of accounts dated 20.05.2013, the OP has claimed Rs. 1,77,930/- as cost of increased area.  Ld. Advocate for the complainant has submitted that under Clauses 1.7 & 1.8, the super area is treated ‘tentative’ against an increase or decrease of which the complainant has no right to protest.  Further there is nothing in the agreement which gives a reasonable highlight as to under what circumstances and the super area be either increased or decreased.  In this regard Ld. Advocate for the complainant has taken me to a decision of Hon’ble Competition Commission of India dated 12.08.2011 in Case No.19 of 2010 (Belaire Owners Association – Vs. – DLF Ltd.).

          Mr. Saptak Sanyal, Ld. Advocate being assisted by Mr. Ananda Ghosh, Ld. Advocate for the O.P. has submitted that the original booked area was 1468 sq. ft. which subsequently got increased to 1522 sq. ft. and in accordance with Clause 9.2 of the Agreement, any alterations/modifications of the area where the increased in area has not exceeded the limit of 10% in those case, no approval was required from the apartment allottee.  In the instant case, as increased in super built up area was only 3.54% which has been nowhere challenged by the complainant in its pleadings, the claim of the amount for excess area of the flat is justifiable.

          It has come to notice that there were sanctioned building plan for nine towers but subsequently, the OP has constructed another two towers being AA & JJ meaning thereby in place of nine towers in the project, the developer has constructed 11 towers.  According to the 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 increased in super built up area in some towers and reduction in some towers. 

It could not understand if additional area is built and on the basis of the same, alleged super area is increased due to alleged installation of additional electric sub-station, then how can super built up area 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 understand how the super area of the apartment can increase. Moreover, the clause 9.2 by itself does not authorise a developer/builder to claim amount from an intending purchaser without giving him prior information regarding increase/decrease of area to ascertain whether the buyer is agreed to purchase the said flat or not.  Therefore, the claim of the OP amounting to Rs.1,77,930/- as cost of increased area appears to be illusory and object behind such claim is to dupe a purchaser.  Therefore, the OP/builder is not entitled to the same.

2. Pro-rata charges for arranging supply of electrical energy @ 68.18P per sq. ft.

The OP has claimed a sum of Rs.1,00,726/- on account of pro-rata charges for arranging supply of electrical energy.  The complainant has alleged that the OP informed that the expenditure for electrical energy at Rs.68.18 P sq. ft. incurred for bringing electrical power from the nearest WBSEDCL/NTESC Sub-station by way of a 33KV HT Line.  Setting up distribution sub-station for converting 33KV Power to 1KV Power for which transformers, panels (high tension and low tension) special relay control etc.  In this regard, it has been submitted on behalf of OP that the OP has demanded charges for arranging supply of electrical energy in accordance with the terms and conditions of the agreement since charges for installation of electricity supply to the apartment was made in accordance with clause 14.4 of the Agreement.  It is stated that the charging of Rs.66.18 P per sq. ft. is on account of installation costs and supervision charges paid to New Town Electricity Supply Co. Ltd. for installation of sub-station in proving electricity to the apartment in the common area.

Serial Nos. 18 & 19 of Part-A to Annexure-IV of the Agreement provides that ‘common areas and facilities’ includes electrical sub-station/transformer/electrical panel/electrical LT Panel Room and as such are included in computation of super built up area of the agreement.  The claim made by the OP was totally illegal and beyond the agreed terms and conditions of the said agreement in as much as for the self same service the OP had charged twice.  To make any apartment in a habitable condition, water, drainage and electricity is necessary at the time of selling the apartment.  The OP was well aware that they have to make a minimum infrastructure for electricity and the same was included in the super built up area.  Cost of electric meter installation and security deposit is directly paid by the complainant to electricity supply company.  OP has done nothing except the basic infrastructure which is included in the super built up area.  Therefore, the claim of the OP of Rs. 1,00,726/- as pro-rata charges for installation of electricity is totally untenable.

3. Other costs including Government charges –

The final statement of accounts dated 20.05.2013 also indicate that the OP has claimed Rs.2,39,730/- 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.  In this regard, Ld. Advocate for the OP has submitted that as per clause 2 of the Agreement, where the apartment of the allottee is held responsible to pay all government charges, tax on land, principal tax, property tax and tax fees etc. the definition of Tax, the apartment allottee agreement includes sale tax also.  It is stated that the Central Government in the Union Budget-2010/2011 has included the provision of service tax on sell of property/flat in case any amount to sell of such property/flat is taken by the builder on completion of the construction of the flat.

The fact remains that the OP has not given any explanation of such charges.  The OP was under obligation to give account to the complainant about payment of their hard earn 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 is 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 was paid and the complainant had no option but to pay the illegitimate demand to take the possession of the apartment.

          Ld. Advocate for the  OP referring a decision of Hon’ble Supreme Court reported in (2000) 1 SCC 66 ( Ravneeth Singh Bagga –vs.- KLM Royal Dutch Airlines & Anr. ) has submitted that the term ‘deficiency’ has been clarified by the Hon’ble Supreme Court in paragraph -5 of the said decision. The referred paragraph is recorded below:-

“5. Section 2 (1)(0) defines the ‘Service’ to mean service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, 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 or personal service.Section 2(1)(g) defines ‘deficiency’ to mean any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being enforce or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service”.

The evidence on record suggests that the complainant being ‘consumer’ as defined in section 2(1)(d)(ii) of the Act hired the services of OP on consideration and despite payment of almost entire consideration amount the OP has failed to deliver possession to the complainant within  the time frame i.e. by 13.10.2011 and thereby OP was deficient to render service to the complainant within the meaning of Section 2(1)(g) read  with Section2(1)(o) of the Act. In that perspective,  the referred decision does not come to any help of the OP. The decision referred by the Ld. Advocate of OP in the case reported in (2014) 1 SCC 708 ( Larsen & Toubro Ltd. & Anr. –vs. – State of Karnataka & Anr. ), the decision of Madras High Court reported in AIR 1938 Mad 1004 ( Bonagiri Sreeamulu  vs. – Karumuri Vankatanarasimham & Ors ) also have no application in the facts and circumstances of the present case   because in our case the complainant has already paid almost the entire consideration amount.

          Ld. Advocate for the Opposite Party has contended that when there is an arbitration Clause in the Agreement,   the  dispute should be settled amicably by mutual discussion or to be referred to the Arbitral Tribunal for settlement in support of such submission, Ld. Advocate for the OP has drawn my attention to the 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 ) .

          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/188/2010 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 arbitrality 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.

          Considering the facts and circumstances of the case and  having heard  the Ld. Advocates for the parties it becomes quite apparent  that the complainants being a  ‘Consumer’ as defined  in Section 2(1)(d) of the Act hired the services of OP in a housing construction on consideration but  the OP was found  negligent or deficient in rendering services within the meaning of Section 2 (1) (g) read with Section 2(1)(o) of the Act by claiming additional amount by adopting of unfair means. The OP has also failed to advance any ‘force majeure’ circumstances. Therefore, the complainant is entitled to some reliefs.

          Considering the above, I think the complainant is entitled to compensation of 1468 sq.ft. x Rs.5/- per sq.ft per month from 13.10.2011 ( after expiry of three years ) till   the date of delivery of possession along with an interest thereon @ 12% p.a. The OP shall not give effect to (1) the cost of increase area (CIA), (2)   pro–rata charges  for arranging supply of electrical energy and (3)  other costs including government charges as mentioned in the final  statement of account dated 20.05.2013. The OP must deliver possession and to execute the sale deed in favour of the complainant on payment of stamp duty and registration charges within 60 days from date after obtaining Completion Certificate from New Town Kolkata Development Authority (NKDA). As the situation compelled the complainants to lodge complaint, they are also entitled to litigation cost which I quantify at Rs. 10,000/-.

          In view of the discussion above, the complaint is allowed on contest with the following directions:-

(1)     The Opposite Party shall pay 1468 sq.ft. x Rs.5/- per sq.ft per month from 11.12.2011 ( after expiry of three years ) till   the date of delivery of possession with a compensation in the form of simple  interest thereon @ 12% p.a. in favour of the complainant in terms of Clause 10.1  of the agreement dated 14.10.2008 to the complainant within 60 days from date;

(2)     The Opposite Party is directed to deliver possession and to execute the sale deed in favour of the complainant on payment of stamp duty and registration charges within 60 days from date after obtaining Completion Certificate from New Town Kolkata Development Authority (NKDA);

(3)     The Opposite Party is directed not to claim any amount under the head of (i) cost of increase in area; (ii) pro-rate charges for arranging supply of electrical energy and (iii) Other costs including government charges from final statement of accounts dated 20.05.2013 and the balance amount, if any, must be paid by the complainant within 30 days from date subject to adjustment of the amount mentioned in (1) above;

(4)     The Opposite Party shall pay a sum of 10,000/- as cost of litigation to the complainant which must be paid within 30 days from date otherwise the amount shall carry interest @ 8% p.a. from date till its recovery.