BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD, THIRUVANANTHAPURAM.

PRESENT

SRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENAKUMARI. A : MEMBER

SMT. S.K.SREELA : MEMBER

O.P. No. 61/2004 Filed on 06.02.2004

Dated : 30.10.2008

Complainants:

1. Lekshmi Ammal, Flat No. MF 4-312, Prasanth Nagar, West Fort, Thiruvananthapuram – 695 023 from 18/60, Sreevilasam, Perumal Koil Road, Thackalay P.O.

2. Dr. S. Seethalekshmi, residing at -do- -do-

3. S. Ramakrishnan, residing at -do- -do-

4. S. Muthulekshmi, residing at -do- -do-

5. S. Raman, residing at -do- -do-

6. S. Lekshmanan, residing at -do- -do-

(By adv. P.A. Ahamed)

Opposite parties:

1. Kerala State Housing Board, represented by its Secretary, Housing Board Building, Thiruvananthapuram.

   (By adv. Saji. S.L)

2. The Regional Engineer, Trivandrum Housing Unit, Kerala State Housing Board, Thiruvananthapuram.

This complaint is disposed of after the period so specified under the Consumer Protection Act, 1986. Though the case was taken up for orders by the predecessors of this Forum on 20.06.2005, the order was not prepared accordingly. This Forum assumed office on 08.02.2008. This O.P having been heard on 07.10.2008, the Forum on 30.10.2008 delivered the following:

ORDER

SMT. S.K.SREELA : MEMBER

The brief facts of the case are as follows: The complainant's father had applied for allotment of MF4 type flat during January 1977, in pursuance of the publication of application for the allotment of residential flats to persons of the middle income group at Prasanth Nagar, West Fort, Thiruvananthapuram. Accordingly, MF4 type flat No. 312 was allotted to the complainant by the opposite parties vide decision dated 31.07.1979 for Rs. 46000/- in addition to an amount of Rs. 1523/- sought to be deposited as share of the complainant in constructing common facilities such as pump house, compound wall, gate etc. Late Sri. Sankara Narayana Iyer on the basis of the letter of allotment, executed an agreement on 27.08.1979, and the key of the flat was handed over to him. As per the terms of the agreement the price fixed for the flat is to be remitted in monthly instalments over a period of 12 years. On the completion of instalments, late Sri. Sankara Narayana Iyer requested the opposite party to execute the Sale Deed, but such execution was evaded and postponed. As per the terms of agreement the price fixed at the time of allotment was treated as tentative and it was further stated the final price will be fixed taking into consideration the additional land value that the opposite party is likely to pay to the land owner, consequent to any land acquisition case and also any additional construction made for common facilities and difference into price will carry interest @ 10.5%. Whileso Sri. Sankara Narayana Iyer expired on 03.09.1994 and the complainants are the only legal heirs to his estate. The 1^st complainant is the widow of the deceased and the other complainants are the children and the legal

heirship certificate issued by the Tahsildar has also been produced for the same. The land originally belonged to the Maharaja of Travancore who surrendered it to the Government as excess land. The Government, after fixing a price, transferred the land to the Kerala State Housing Board, the 1^st

opposite party and therefore there is no land acquisition claim on the land. No additional construction was also made in the building. As per the terms of the contract, the opposite party is bound to execute the Sale Deed once the entire price amount is paid. The complainants have been requesting the opposite parties to execute the Sale Deed. On 13^th February 1998, the opposite parties send

communication stating that the final price of the building was fixed at Rs. 54243/- and thus the complainant was called upon to pay a total claim of Rs. 25,867/-. The hire purchase transaction of the flats which were allotted in August 1979, were closed in July 1991 but the opposite parties took the decision only on 15.11.1997. The final price has been communicated after a lapse of 19 years and the allottees have been asked to pay interest @ 10.5% for all these years.

The flats are allotted to the persons like the late Sri. Sankara Narayana Iyer on the basis of the Hire Purchase Agreement. The opposite party is a Statutory Authority and is expected to render its service as per rules. The terms and conditions regarding the allotment of the flats are governed by the provisions contained in the Hire Purchase Agreement. While fixing the final price any escalation amount that the board was called upon to pay to the land owners and expenditure for additional construction of common facilities alone can be taken into consideration. In the instant no amount was paid towards escalation of land value to the Government and no additional construction was also made. While demanding a higher amount towards price of the building without actually incurring any additional expenditure is a claim against the terms of the Hire Purchase Agreement and the relevant rules invoke as such a deficiency of service. Further the flats were allotted in August 1979 and the period of payment of hire purchase expired on July 1991 whereas the Board took a decision to fix a final price only on 15.11.1997, communicated only on February 1998 after a lapse of 19 years. As per the terms of the contract, the allottee is bound to pay interest at the rate of 10.5% for the difference in the tentative price and final price from the date of allotment till the date of fixation of final price. The long lapse of 19 years in fixing the final price is nothing but criminal negligence and wanton deficiency of service and the complainant is not at all bound to pay any amount as claimed in the notice. Sankara Narayana Iyer had been requesting to get the sale deed executed all these years. A final letter was sent on 12.10.2000 with affidavit. Non-execution of the sale deed even after receipt of the sale consideration is a serious deficiency in service on the part of the opposite party. Due to the negligent and deficient attitude of the opposite party, the complainant has sustained mental agony and strain which is to be compensated by the opposite party.

The 1^st opposite party has filed version for and on behalf of the 2^nd opposite party also contending as

follows: The complaint is not maintainable. Late Sri. Sankara Narayana Iyer was allotted flat No. MF 4 312 in Prasanth Nagar Housing Scheme vide allotment letter No. PRMF-4/15 dated 08.02.1979 and the tentative cost of the flat was fixed at Rs. 46000/- and the agreement for sale of the flat was executed between the complainant and the Board on 27.08.1979. The complainant was requested to remit an amount of Rs. 1523/- towards proportionate share of the cost of construction of compound wall, fixing gates, water tanks, pump house etc. vide letter dated 23.08.1984. But he had not remitted the above amount. These works were carried out at the request of the Prasanth Nagar Allottees' Association. The complainant executed the necessary agreement with the Board on 27.08.1979 and as per the agreement the tentative price fixed for the flat is to be remitted in equal monthly instalments over a period of 12 years and the allottee is bound to pay the difference between the tentative cost and final cost together with interest at 10.5%. The complainant had not remitted the dues in full. He was a chronic defaulter of hire purchase instalments. On 30.02.1989 a demand notice was issued by the opposite party to remit the arrears due from him. As per condition 8 of the agreement the complainants are liable to pay the penal interest of Rs. 3,938/- towards belated E.M.I. The fact of his death was intimated to the opposite parties by 1^st complainant only in the year 1996 when she requested for transfer of allotment of the said flat in the name of the 3^rd complainant. She was asked to submit the original heirship

certificate, death certificate and consent from other legal heirs vide letter dated 22.07.1986 of the opposite party. However she failed to produce the legal heirship certificate till 09.06.2003. Meanwhile the amount to be remitted towards difference in cost and difference in additional work cost as per the final cost fixed by the Board was intimated to their residential address in Thuckalay vide letter dated 13.02.1998 of the opposite parties. Without remitting the dues the 1^st complainant requested for

transfer of ownership of the flat to her name vide her request dated 26.12.1998 and she was again asked to produce the death certificate of late Sri. Sankara Narayana Iyer. Legal heirship certificate, consent deed of other legal heirs and affidavit and declaration in the prescribed format to proceed with her request vide letter dated 02.01.1999 of the opposite parties. Though she produced the death certificate and consent of other legal heirs on 12.10.2000 she failed to produce the legal heirship certificate until 06/2003. She was requested to produce the affidavit and declaration in prescribed format to transfer the allotment of the flat in her name vide letter dated 05.09.2003 of the opposite parties for which no response has been received till date. The 1^st complainant was also informed that an

amount of Rs. 41,472/- is to be remitted before 31.01.2003 for issue of sale deed vide letter dated 27.01.2003 of the opposite parties. It is admitted that there was no land acquisition claim on the land. The complainant was asked to pay an amount of Rs. 25,867/- on or before 31.03.1998. No request for sale deed has been received from the complainants. In fact, 1^st complainant has requested for transfer of allotment of the flat first in the name of the 3^rd complainant and later in her name itself vide her

requests in 1996 and 1998 respectively, which did not materialize since she failed to produce the requisite documents. The complainants have not remitted the final cost demanded by the Board either. The final price of MF4 flat has been fixed as Rs. 54,243/- and the final price for additional work was fixed at Rs. 2124/- and the complainant has been requested to remit Rs. 25,867/- only on or before 31.03.1998. The complainants are entitled to get the sale deed only after remittance of the balance tentative cost, the difference between the tentative cost and final cost and the additional cost for additional amenities carried out at the request of the Allottees' Association with interest upto the date of remittance. As per clause (9) of the agreement the Kerala State Housing Board shall be entitled to refix the final price of the flat as described in the schedule hereto, taking into account inter-alia the enhanced compensation awarded by Courts and Tribunals, the cost incurred by the Board or/and its predecessor in interest for prosecuting such proceeding in courts and Tribunals and also the increased cost of development works and amenities undertaken with respect to the scheme after a final settlement of accounts in connection therewith. The Board shall also be entitled to revise and refix the cost of the flat after the finalization of the total cost of construction mentioned above. As per clause 10 of the agreement the allottee is liable to pay the amounts to the Board with interest at 10.5% per annum, the difference between the final cost and the tentative cost. The 1^st complainant had requested vide letter

dated 26.12.1998 for transfer of allotment of Flat MF4-312 in her name and she was asked to produce the legal heirship certificate, death certificate, consent deed of other legal heirs and affidavit and declaration in prescribed format vide letter dated 02.01.1999 of the opposite parties. She produced the death certificate and consent deed of other legal heirs and affidavit and declaration on 12.10.2000. However the legal heirship certificate was produced only in 6/2003. By that time the format of affidavit and declaration has undergone changes and she was asked to produce a fresh affidavit and declaration vide letter dated 05.09.2003 of the opposite parties to which no response has been received from the complainant yet and hence prays for dismissal of the complaint.

The 3^rd complainant has filed affidavit for and on behalf of other complainants also and Exts. P1 to P4

were marked on his side. Opposite parties had no evidence.

The issues that would arise for consideration are:-

1. Whether the complainants are liable to pay any additional amount to the opposite party?

2. Whether the complainants are entitled to get any of the reliefs claimed?

Points (i) & (ii):- There is no dispute with the fact that Late Sri. Sankara Narayana Iyer has been allotted MF4 type of flat No.312 in 1979 for a cost price of Rs. 46,000/-. As per the agreement entered into between the said person and the opposite parties, the price fixed for the flat is to be remitted in monthly instalments over a period of 12 years. According to the complaints, the instalments were paid by late Sri. Sankara Narayana Iyer and he had been requesting for the execution of the sale deed as per the agreement which was evaded by the opposite parties. On 03.09.1984 the above mentioned Sankara Narayana Iyer expired and the legal heirship certificate is also produced. The complainants made repeated requests for execution of the sale deed for which the opposite party had sent a letter dated 13.02.1998 stating that the final price of the building has been fixed as Rs. 54,243/- and for common facilities such as pump house, compound wall, gate etc. as Rs. 2,124/-. Thus the complainants were asked to pay a total claim of Rs. 25,367/- which according to the complainants are gross deficiency in service on the part of the opposite parties and further the long lapse of 19 years in fixing the final price shows the negligence on the part of the opposite parties.

The opposite parties' counsel contended that an amount of Rs. 926/- is still due towards principal portion and an amount of Rs. 3938/- towards penal interest against the hire purchase account of the tentative cost of the flat and the complainant was asked to remit an amount of Rs. 41,472/- on or before 31.01.2003 for the issuance of sale deed. According to the opposite parties, the final price of MF4 flat has been fixed as Rs. 54,243/- and the final price for additional work was fixed at Rs. 2,124/- and accordingly the complainant was requested to remit Rs. 25,867/- on or before 31.03.1998 for the issuance of the sale deed. But the complainant's counsel argued that the flats were allotted in August 1979 and the opposite parties fixed the final price only on 15.11.1997 which was communicated in February 1998 which is after a lapse of 19 years, and this lapse of 19 years in fixing the final price is negligence and deficiency in service on the part of the opposite parties. We have perused the documents on record. The above final price has been communicated after a lapse of about 19 years for which the complainants have been asked to pay interest @ 10.5% for all these years. The main issue to be considered is whether such refixation of price by the opposite parties after a lapse of 19 years is just and warranted.

As per Ext. P1 the tentative price has been fixed as Rs. 46,000/- on the date of agreement which is 27.08.1979. The final price of the flat as on 31.07.1979 is fixed at Rs. 54,243/-. As per Ext. P1 the difference between the tentative price and the final price has been calculated as Rs. 25,867/-. The interest has been calculated upto 31.03.1998. If the final price had been fixed within a reasonable period of one or two years from the date of agreement, this amount which appears to be unreasonable and unwarranted would not have happened. Moreover the opposite parties have not produced any documents to substantiate their reason for the delay.

The complainant's counsel had produced order of this Forum in O.P 346/1998 wherein the claim of the opposite parties for further payment has been challenged by the complainant on the ground that the final price has been communicated after a lapse of 19 years for which the complainants have been asked to pay interest @ 10.5% for all these years. In the said order, the Forum had fixed Rs. 8,844/- as the reasonable amount to be remitted by MF4 type of flats and the counsel of the complainants contended that the above order has been confirmed by the Hon'ble Supreme Court, which has also produced.

We have gone through the order of this Forum produced by the complainant. On considering the entire facts narrated in the order of this Forum dated 30.05.2000, we find that, the facts narrated in the complaint and the facts of the above order are similar and are squarely applicable in this case. The main issue which has been considered therein is whether such a re-fixation of price by the opposite party after a lapse of 19 years is just and warranted. The Forum has found that the amount of interest calculated appears quite unreasonable and unwarranted. “If the final price has been fixed within a reasonable period of one or two years from the date of agreement, this would not have happened. Fixing the final price after a delay of 19 years and then charging interest retrospectively is found unreasonable .. even assuming that the opposite party had the right to fix the price; yet the fixing of the price must be within a reasonable time. The District Forum has not interfered in the quantum of price finally fixed for the flats; interference was only with respect to the charging of interest for 19 years. The justification for the delay now offered cannot be accepted because we do not consider the reasons now attempted cannot be accepted as justifiable”. Considering the above order, we are also of the view that, though the opposite party is vested with the right to fix the final price, it should have been done within a reasonable period. In the above order, the amount to be paid by MF4 has been fixed as Rs. 8844/- from 30.05.2000 and we fix the same amount with 10.5% as just and reasonable.

The original allottee Sri. Sankara Narayana Iyer is no more now. The complainants have not clarified in whose name the sale deed has to be executed. Hence the complainants are directed to deposit an amount of Rs. 8,844/- with 10.5% from 30.05.2000 within 30 days of receipt of the order along with sufficient records as demanded by the opposite parties, in whose favour the sale deed has to be executed and the opposite parties on receipt of the amount shall execute a sale deed in favour of the proposed complainant within 30 days of deposit and production of relevant records. No order as to costs and compensation.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the day of 30^th October 2008.

S.K. SREELA : MEMBER

G. SIVAPRASAD : PRESIDENT

BEENAKUMARI. A : MEMBER

O.P. No. 61/2004

APPENDIX

I COMPLAINANT'S WITNESS :

NIL

II COMPLAINANT'S DOCUMENTS :

P1 - Photocopy of letter No. E7/MF4-312/PRN dated 13.02.1998

issued by the opposite party to the complainant.

P2 - Photocopy of letter dated 16.06.2003 issued by the opposite

party to the complainant.

P3 - Original legal heirship certificate dated 17.04.2003.

P4 - Original letter dated 05.09.2003 issued by the opposite party

to the complainant.

III OPPOSITE PARTY'S WITNESS :

NIL

IV OPPOSITE PARTY'S DOCUMENTS :

NIL

PRESIDENT