Final Order / Judgement

(Delivered on 29/06/2017)

Per Mr. S. B. Sawarkar, Hon’ble Member

1. The above listed appeals are filed against the order of the District Forum, Nagpur passed in complaint No. 453/2010 dated 8/7/2011, partly granting the complaint and  directing the opposite party (for short OP) to provide the amount of Rs. 82,500/- received from complainant from the date of acceptance that is from 17/10/2007 till final payment with interest at the rate of 12 percent per annum.  Further directed the OP to provide Rs. 5,000/- for physical and mental harassment to the complainant with a cost of Rs. 2,000/-. Further dismissed the remaining demands of complainant and directed to comply the order in the span of one month and in failure to pay the interest at the rate of 15 percent per annum  instead of 12 percent  per annum by the OP.
2. Aggrieved against the order, the original OP filed the appeal vide No. 374/2011 and advocate Mr. Hitesh Verma appeared on behalf of OP.
3. Also aggrieved against the order, the original complainant also filed an appeal though advocate Mr. Yogesh Shukla with a request to enhance and provide the prayer vide appeal No. 409 of 2011.
4. As  both the appeals are filed against the same order  which involves similar facts  and law, we decided to hear both the appeals together and pass the common order. Also decided to maintain the same nomenclature of complainant and OP in appeal also.
5. a. The short facts of the case are that the complainant filed a complaint stating that he saw the advertisement dated 10/10/2007 given by the OP calling applications for allotment of flats for  the higher income group at Nandanwan area in Nagpur. He submitted an application  to get the flat with 10 percent amount of Rs. 82,500/- as earnest deposit. The complainant filed a complaint that by his application dated 17/10/2007, a flat got  reserved in the 16 flats to be constructed by the OP. In the advertisement, the OP gave the cost of the flat to be of Rs. 8,25,000/- which according to advertisement was to be constructed and provided in the span of two years from the date of booking. However, the OP neither  provided the flat in the span of two years nor started  the construction of the flats in two years as per the advertisement.  However the OP on 16/7/2009 sent a notice by escalating the price of the flat and directing  the complainant to  give consent  to pay the increased cost of Rs. 6,10,800/-. The complainant was prepared to deposit the proposed cost of the flat published in the advertisement. However the complainant was not prepared to provide the escalated cost of  Rs. 6,10,800/- demanded by the OP and felt that the demand is exorbitant and illegal and it was the effort of the OP to extract additional amount from the complainant. The complainant therefore vide his letter dated 14/5/2010 informed to  the OP that   he is not prepared to pay the increased  cost and he has not been provided the flat in the span of two years. 

2. He therefore sent a notice to the OP. As the OP did not reply to his notice, he filed a complaint before the Forum with a prayer to direct the OP to provide him the constructed flat by accepting the original published cost from the complainant or to refund  him the deposited amount with interest totaling into Rs. 1,08,900/- and as the complainant was required to live in the rented house as the flat was not made available to him for three years, hence provide him the rent at the rate of Rs. 3,000/- per month totaling  to Rs. 5,08,000/-. Further provide him compensation of Rs. 1,50,000/- for physical and mental harassment and cost of complaint of Rs. 10,000/- totaling all to Rs. 6,68,000/- with interest at the rate of 18 percent  per annum upon it.  

6. On notice, the OP appeared and countered the complaint stating that the  complainant is not their consumer as the advertisement was only given with the intention to evaluate the viability  of the flats scheme. It was only stated that after evaluation of  proper response only the scheme would be brought into action. No assurance was given to provide the flat in the span of two years. However before the scheme could come  into existence, the prices got escalated. Hence the options from the applicants were invited before any allotment. The complainant refused to pay the extra cost. Hence the amount deposited of Rs. 82,500/-  by him was returned on 15/7/2010. The complainant is staying in the quarter allotted to his wife by the Government. Hence does not deserve to be paid the rent.  Hence the complaint being  on wrong presumption requested to dismiss it.
7. The learned Forum heard both the parties and held that the OP did not specify as to what response it got from the advertisement. Also the complainant did not deposit  the entire amount of the flat and hence can not now demand the flat in the old cost only. However taking the 10 percent amount and without providing flat asking for additional escalated price after two years by the OP  constitutes  a deficiency in service. Also the Forum has no power to comment upon the price fixation. The cheque of refund sent by the OP was not encashed by the complainant and he is staying in the flat allotted to his wife. Therefore his demand to provide him the flat in old rate and the rent claimed  by him cannot be accepted. Hence passed the order supra.
8. Aggrieved thus, against the order are the above two appeals by both the parties. The appeal bearing No. 409/2001 is filed by complainant for enhancement according to his prayer  in the complaint and  appeal bearing No. 374/2011 is filed by OP to quash the order being based on improper reasoning.
9. The advocate for the OP relied on the judgments in following cases.  

1. National Commission Judgment passed in A.N.Sehagal Vs. Delhi Development Authority published at II(1995) CPJ 17 (NC) wherein the Hon’ble Commission held that the pricing of the flat or plot does not fall within the four corners of Consumer Protection Act, 1986
2. National Commission Judgment passed in Gurinder Bedi Vs. Delhi Development Authority, wherein the Hon’ble Commission held that charging of escalated price by the respondent  does not fall within the definition of deficiency in rendering the service.

1. The advocate for the OP submitted that the impugned advertisement had a clear indication that it is to assess the  viability and demand to execute the scheme. The earnest money was taken to define the actual demand for the flats. Hence the earnest money was taken. The complainant was not allotted any flat. before  his application could be considered, he was asked to give consent for the escalated  price  vide  first letter dated 1/10/2007 which was just after  nine months from the advertisement  given in the newspaper. However the OP had sent the first letter to submit the consent on 25/2/2008 after the receipt of application from the complainant on 15/10/2007, within six months. As the complainant declined to give his consent for the escalated price, the amount deposited by him was returned vide letter 15/7/2010. The advocate of the OP filed the copy of the letter and the copy of the cheque.
2. The advocate of the OP submitted that the complainant was never allotted the flat  and hence cannot be a consumer. He himself did not encash the cheque. Hence the OP cannot be saddled to pay him the interest upon it for such a long duration till final payment. The learned Forum failed to properly evaluate the wordings of  the advertisement and holding that the amount taken along with application  and further letter for consent after  nine month to be deficiency in service, passed unrealistic order.
3. The learned advocate of the OP further submitted that OP cannot be held responsible for the rent if any paid by the complainant and cannot be asked to provide the flat in the old rate when the complainant is no where eligible and was not allotted the flat. No assurance was there in the advertisement to provide the flat in two years. The remaining amount of the flat was going to be due to be paid in five installment after the allotment of the flat and the commissioning of the scheme. Hence the order of the learned Forum being on wrong presumption deserves to be set aside.

10. The advocate of the complainant on the other hand relied on the    decision in following cases.  

1. National Commission Judgment passed in AP Housing Board Vs. K. Shri Harireddi published at 2008  (NCJ) 719 (NC) in which the Hon’ble Commission held that the District Forum has a power to conduct denovo enquiry  regarding fixation of price fixed by housing board as breach of rules and regulation in fixing price of land and cost of construction would be deficiency in service.
2. The advocate for the complainant submitted that once the complainant deposited the earnest amount, he stands allotted  of the flat. He therefore becomes consumer. He was informed to give the consent for escalation of price after almost a span of one year when the advertisement informed that the  flat would be given in the span of two years  due to which the complainant gave his refusal properly. As after taking the money, the complainant was not given the flat, therefore the OP caused deficiency in service. Hence  the OP deserves to provide the complainant the flat in the old rate as per the advertisement and also the entire amount of rent which he was required to pay after not getting the flat. The learned Forum did not consider it properly. Hence the order needs to be modified for the enhancement according to the prayer of complainant .  

11. We considered the contentions of both the parties. We find that the advertisement dated 10/10/2007 clearly shows that it is published to evaluate the demand of flats in the higher income group in the area. We perused the application of the complainant wherein we find that the income of the complainant and his wife is more than Rs. 20,000/- per month which does not fall in the condition of the allotment  provided in the advertisement. It shows that the complainant had only filed the application and was not allotted the flat. The letter sent to him regarding escalation of price by the OP is within six months from the date of filing his application. The amount deposited by him was returned because of his refusal to accept the escalated cost in the span of nine months only.
12. We further find that the complainant cannot be the consumer when no allotment of flat was made to him.  Non encashment of the cheque of Rs. 82,500/- by the complainant cannot be the responsibility of  the OP to pay him the interest till he encashes the cheque. We find that the learned Forum did not peruse the advertisement in words and spirit and held that  only delayed letter asking consent and return of earnest money was deficiency in service. We therefore find that there is no element in the action of the OP which can be considered as deficiency of service.
13.  We therefore see that it is a normal procedure to evaluate the demand at a particular place and then finalize the details, considering the applications for allotment which fall in the parameters of the conditions. It is also normal to ask for earnest money along with application so as to evaluate the sincere demand and to weed out the casual applicants in the scheme. Thus the learned Forum failed to evaluate this material aspect of the case and  passed the order with interest and compensation which being on wrong presumption deserves to be set aside. At the most the complainant deserves to get the interest on the earnest money from the date of filing the application on 15/10/2007 till refund of amount by cheque on  15/07/2010. We find no reason to provide any compensation or cost in the event of absence of deficiency in service and when we provide a interest on the earnest money. Hence the order below.

ORDER

1. The appeal No. 374/2011 is partly allowed as filed by the OP.
2. The appeal No. 409/2011 filed by the complainant stands dismissed.
3. The order of the learned Forum under its clause No. 2 is modified and substituted as under.

The OP to provide Rs. 82,500/- with interest at the rate of 12% per annum  from the date of its receipt i.e. from  17/10/2007 to the  date of refund by cheque on 15/07/2010, to the complainant.

4. Rest of the order under clauses from  Nos. 3 to 5  stands to be set aside.  
5. Parties to bear  their own cost in appeal.
6. Copy of order be provided to both the parties, free of cost.