Chandigarh

StateCommission

CC/7/2023

PRAKASH LAL AHUJA - Complainant(s)

Versus

THE CHANDIGARH HOUSING BOARD THROUGH ITS CHAIRMAN - Opp.Party(s)

NEERAJ PAL SHARMA & GAURAV BHARDWAJ

30 May 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T. CHANDIGARH

[Additional Bench]

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Complaint No.	:	07 of 2023
Date of Institution	:	23.01.2023
Date of Decision	:	30.05.2024

 

Prakash Lal Ahuja son of Late Sh. Girdhari Lal Ahuja, resident of Flat No. 156-A, Sector 51-A, Chandigarh (U.T.) – 160047.

 

•  

 

V e r s u s

 

The Chandigarh Housing Board, through its Chairman, 8, Jan Marg, Sector 9-D, Chandigarh (U.T) – 160009.

 

…. Opposite Party

 

BEFORE: MRS. PADMA PANDEY   PRESIDING MEMBER

                PREETINDER SINGH      MEMBER

PRESENT	:	Sh. Neeraj Pal Sharma, Advocate (on V.C.) along with Sh. Gaurav Bhardwaj, Advocate for the Complainant.
		Sh. Deepak Malhotra, Advocate for the Opposite Party along with Sh. Tarun Kumar, J.E O/o CHB, Chandigarh.

PER PADMA PANDEY, PRESIDING MEMBER

 

1]                Brief facts of the case, as emerged from the Complaint are that pursuant to the Group Housing Scheme floated by the Opposite Party described as “200 Two Bed Room Flats” under Self Financing Scheme, 2015, on lease hold basis in Sector 51-A, Chandigarh, the Complainant participated in the Scheme-B thereof, which was by way of bidding with a reserve price of ₹69,00,000/-, vide Application No. 889 dated 30.0.2016, along with initial 10% of the reserve price being ₹6,90,000/- and a sealed bid for ₹71,00,000/- for the Flat/Dwelling Unit.  The Complainant was declared successful by the Opposite Party on 10.06.2016 and was issued Acceptance-cum-Demand Letter (ACDL), thereby registering him for Flat/Dwelling Unit No.156-A (measuring 1073 sq. ft.), First Floor, Sector 51-A, Chandigarh and was asked to make payment of the balance sum ₹67,29,500/- within 90 days, which period was extended vide another letter issued in July 2016 to end effective 22.10.2016.  In the aforesaid event, on 10.06.2016, the Chairman of Opposite Party Board assured the allottees that all the flats of the Scheme would be made freehold from the earlier leasehold basis.  The Complainant paid the entire amount along with TDS of ₹71,000/- on 19.10.2016 and 20.10.2016. It has been averred that the period for the development of the flats was to be 36 months from the date of issuance of ACDL.  However, the Complainant was intimated of the allotment of the Flat in question vide letter dated 04.02.2020, with a further demand of ₹1,12,953/-, which he deposited on 24.02.2020. Finally, the Opposite Party released the possession of the Flat to the Complainant on 03.03.2020, against the promised date of 09.06.2019. Having apprehension of the quality of construction & finishing, the Complainant sought information under the RTI Act and on the basis of the information received, realizing that the workmanship was not only poor but also had patent & latent defect galore, he got examined his flat from a qualified and experienced Civil Engineer who after due examination submitted his report on 09.07.2022. In the meantime, realizing that the assurance advanced by the Chairman on 10.06.2016 to convert the flats from lease hold basis to free hold basis, was a subterfuge, the Complainant made the payment of ground rent which was charged to him along with penal interest thereon for the delay in payment. Eventually, the Complainant got served a legal notice dated 26.09.2022 upon the Opposite Party. However, the Opposite Party neither acknowledged the same nor made any efforts to reconcile the dispute. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the Opposite Party, the Complainant has preferred the instant Consumer Complaint under Section 47(1)(a)(i) & (ii) read with Section 49 of the Consumer Protection Act, 2019.

 

2]                Notice of the complaint was sent to Opposite Parties seeking their version of the case.

 

3]                Opposite Party contested the claim of the Complainant by filing reply, inter alia, admitting the basic facts of the case. It has been pleaded that per Clause 25 of the Brochure the development works/construction at sites shall be approx. 36 months from the date of issuance of ACDL except for some unavoidable circumstances.  If for the reasons are beyond the control of Opposite Party Board, it is unable to deliver the unit it shall be liable to refund to the allottees the amounts received alongwith saving bank interest @4% p.a. and shall not be liable to compensation. There was uncontrollable delay in shifting 11 KV wires so the flat has been allotted to the Complainant with some delay. It has been asserted that there was no compromise on the quality of construction and the same was not poor at all. The flats were constructed as per the drawing and as per CPWD specifications. There were some basic faults such as seepage and broken tiles, which on receiving Complaint from the Complainant was rectified to his satisfaction. There was no assurance advanced by the Chairman of the Opposite Party on 10.06.2016 rather, it was delay on the part of the Complainant to deposit payment of due ground rent which he had deposited with penal interest as per rules.  The cause of action set up by the complainant was denied.  The consumer complaint was sought to be contested on these lines.

 

4]                The complainant has filed a rejoinder, wherein he has reiterated all the averments, contained in the complaint, and repudiated those, contained in the written version of Opposite Party.

 

5]                Parties led evidence by way of affidavits and documents.

 

6]                We have heard the learned counsel for the contesting parties and gone through the record of the case with utmost care and circumspection.  

 

7]                After scanning of record our findings are as under:-

 

8]             Admittedly, an amount of ₹74,19,500/- stood paid by the Complainant to the Opposite Party towards allotment of Flat No. 156-A, admeasuring 1073 sq. ft., which was to be delivered within 36 months from the date of issuance of Acceptance-cum-Demand Letter. The said Acceptance-cum-Demand Letter was issued to the Complainant on 10.06.2016 thence for all intents and purposes the possession was to be delivered by the Opposite Party latest on/before 09.06.2019.

 

9]                It is an undisputed fact that possession letter in respect of the unit was issued to the Complainant vide letter dated 03.03.2020 and the actual physical possession was taken by the Complainant on 08.06.2020 as he could not take the possession earlier due to lockdown/curfew. To wriggle out of the situation, the Opposite Party has taken refuge of the force majeure circumstances that the delay in delivery of possession of the Unit to the Complainant was solely for the reason of overhead 11 KV HT line and Poles which were removed by the Electricity Department on/around September 2019 and then that area was made available to the Contractor of the Opposite Party for the construction of the units, including the one of the Complainant.  

 

10]              Under above circumstances, the moot question which falls for consideration is, as to whether, the opposite party can claim any immunity for delay in offering possession of the unit in question, on the grounds mentioned above. Pertinently, the scheme in question has been floated by Opposite Party – Chandigarh Housing Board for general public. Before undertaking such a Scheme, it has to prepare a proper framework in accordance with law and presumption is that the Scheme must have been framed, keeping in view the financial implications and other things. After considering the pros and cons, the Scheme is supposed to have been launched by the development authority, being a public authority. Taking the same into consideration, the applicant applies for allotment of a unit in such a Scheme, specifically when such a Scheme is launched by the Government Authority for the welfare of the general public. The said Scheme was launched by the Opposite Party for the welfare of the general public, so that needy person can have his/her own house, if he/she or his/her spouse or other dependents were not having any house. Keeping in view all these terms and conditions, complainant purchased the apartment from the Opposite Party.  However, Opposite Party failed to develop the project and failed to deliver possession of the unit allotted to the complainant, within the stipulated period.  Needless to mention here that the hard earned money to the tune of ₹74,19,500/- was paid by the complainant with a hope to have his unit within the stipulated time. However, his hopes have been dashed to the ground when the Opposite Party laid the blame for the delay elsewhere, first on its own lack of foresight, then on its lackluster coordination efforts with the Electricity Department for removal of the overhead HT lines as also the electricity poles.

 

11]              From the peculiar circumstances of this case, it has been proved that the Opposite Party made false representations, which were materially incorrect and were made in such a way that the complainant, to whom it was made, was entitled to rely upon it and he may act in reliance on it. The complainant is thereby involved in disadvantageous contract with the Opposite Party and suffered financial loss, mental agony and physical harassment. Representations/statements made at that time were believed to be true, which act amounts to grave deficiency in providing service, negligence and adoption of unfair trade practice on the part of the Opposite Party, which has definitely caused a lot of mental agony, harassment and financial loss to the complainant. Moreover, bare perusal of the record transpires that it was solely on account of the non-deposit of funds for shifting of 11 KV lines with the Electricity Department that the said Department failed to act.  In view of above, the plea of the Opposite Party that the delay was beyond its control due to shifting of 11 KV lines stands rejected and the Complainant is entitled to delayed compensation for the period of delay in delivery of possession.

 

12]              Learned Counsel for the Opposite Party argued that even if owing to any force majeure conditions or due to any reasons beyond the control of the Opposite Party, the Opposite Party is unable to deliver the unit to the allottee, the Opposite Party shall be liable to refund to the allottee the amount received along with saving bank interest @4% p.a. and shall not be liable to compensation. However, per material on record, as the Complainant has not asked for the refund and in fact, took possession of the unit, therefore, his limb of argument is of no significance at this juncture.

 

13]              Now, we will like to decide as to what amount of compensation should be granted to the complainant, for the period of delay in delivery of possession of the unit. On account of delay in actual delivery of possession of the unit to the complainant, certainly he had suffered mental agony, hardships and financial loss. In the case titled as Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243, the Hon’ble Supreme Court discussed about the extent of the jurisdiction of the Consumer Fora to award just and reasonable compensation for the harassment and agony suffered by a consumer. Though, counsel for the opposite party contended with vehemence that the Complainant has made declaration to the effect that he has gone through and understood the terms & conditions of the Scheme as laid down in brochure of the Scheme and undertook to abide by the same. The Complainant further declared that he shall not claim any interest on the amount deposit made in the consideration of allotment of dwelling unit under the Scheme. It may be stated here that this Commission is not bound to rely on a harsh, oppressive and unconscionable clause contained in the terms & conditions of the Scheme/ allotment letter because it is well settled law that a court can strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between the parties who are not equal in bargaining power. The consideration or object of an agreement is unlawful inter-alia if it is of such a nature that, if permitted, it would defeat the provisions of any law or if the court regards it as immoral or opposed to public policy. If the object of some terms and conditions of agreement is unlawful, the same are deemed to be void. Our this view is supported by the judgment passed by the Hon'ble Supreme court in the case of Central Inland Water Transport Corporation Ltd. & Anr. Vs. Brojo Nath Ganguly & Ors. (1986) 3 SCC 156 wherein it has been clearly held that the courts can strike down the terms of a contract. The Hon'ble Court has held that "......this principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between the parties who are not equal in bargaining power...." The draft legislation provided by the Law Commission of India in its 199th Report which addresses the issue of 'Unfair  (Procedural & Substantive) Terms in Contract' has stated  that "A contract or a term thereof is substantively unfair if such contract or the term thereof is in itself harsh, oppressive or unconscionable to one of the parties."  The above view has been reiterated by the Hon'ble Supreme Court in Pioneer Urban Land and Infrastructure Ltd. vs. Gouvindan Raghavan Civil Appeal No.12238/2018 wherein in paragraph nos. 3.8, 6.3, 6.6 & 6.7, it has been clearly held that if the terms of contract are harsh, oppressive and unconscionable to one of the parties, such a contract cannot be relied upon and Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power.  In this view of the matter, contention raised by the opposite party is rejected. 

 

14]              In Nagesh Maruti Utekar Vs. Sunstone Developers Joint Venture, Consumer Case No. 12 of 2017, decided on 04 May 2022, the Hon’ble National Commission awarded interest @9% p.a. from the committed date of delivery till possession is delivered. Relevant part of the said order is reproduced hereunder:-

 

“……Consequently, the Opposite Party Developer is directed to pay interest @9% w.e.f. 31.03.2014, i.e., the expected date of delivery of the possession, on the amount deposited by the respective Complainant till 02.09.2017, i.e., the date on which the possession of the Flat was offered by the Opposite Party Developer, within two months from today……”

                             

                   In Shreya Kumar & 11 Ors. Vs. M/s. Ansal Housing & Construction Ltd. & 3 Ors., Consumer Case No. 1021 of 2017, decided on 05 May 2022, the Larger Bench of the Hon’ble National Commission has awarded interest @9% p.a. from the committed date of delivery till possession is delivered. Under above circumstances, in our considered opinion, if we grant interest @9% p.a. to the complainant on the entire amount deposited by him, from the due date of possession of their unit, as held above, till delivery of possession thereof, that will meet the ends of justice.

 

15]              Learned Counsel for the Complainant argued that the unit allotted was shorn of quality construction and brimming with latest and patents defects. To prove the same, he pointed out that the Complainant appointed a duly qualified & experience Civil Engineer to physically examine his flat and to submit a report qua defects found therein. The said Engineer after examining the flat gave detailed report dated 11.07.2022 which accounts for Annexure C-10.  Per contra, the Opposite Party took a stand that the private report submitted is irrelevant since the flats were constructed as per the drawing supplied by the Chandigarh Housing Board and as per CPWD specifications. However, it is pertinent to add here that the Opposite Party has miserably failed to adduce into evidence the said CHB drawing and the CPWD specifications to avoid any scrutiny thereof by this Bench. The photographs placed on record by the Complainant not only speak volume about the material used by the Opposite Party, but also depicts the flaws in the construction, thereby compromising the strength of the building. In this view of the matter, we do not find any substance in the stand taken by the Opposite Party and the same stands rejected.

 

16]              Record transpires, at the time of taking physical possession of the flat in question on 08.06.2020, the Complainant made Complaint with regard to some basic faults such as seepage and broken tiles etc., which per Opposite Party were duly rectified. Learned Counsel for the Opposite Party argued that during handing over the physical possession of the flat, the Complainant did not raise any question qua the external/internal quality of construction being very poor or that the flat suffered from many permanent defect. However, we do not find any merit in this limb of arguments. It is pertinent to mention here that an allottee of residential flat does not cease to be consumer of builder/developer on taking possession of the said flat. Recently the Hon’ble Supreme Court in Civil Appeal No. 3343 of 2020 titled as “Debashis Sinha & Others Vs. M/s R.N.R. enterprise Rep. by its Proprietor/ Chairman, Kolkata & Ors.”, has observed that flat-owners, who are often forced by the circumstances to take possession of apartments even if the amenities promised by the builder are not provided, do not forfeit their right to claim such services from the builder. Further, in Neo Build Infrastructure Pvt. Ltd. & Anr. Vs. Sushil Ranjan Roy & Anr., (2024) CPJ 127 (NC), the Hon’ble National Consumer Disputes Redressal Commission has held that a consumer can raise dispute either in respect of any deficiency a per original agreement or any deficiency detected post purchase. 

 

17]              The Complainant claims that the Opposite Party demanded a sum of ₹42,008/- under the head of additional cost for two no. of windows for corner units plus 18% GST and ₹6,522/- as ground rent on flat allotted. According to him, this demand was illegal since per the terms & conditions of the Scheme, the bid price plus taxes already stood paid and not a single paisa more could have been demanded by the Opposite Party.  Learned Counsel for the Opposite Party argued with vehemence that the Opposite Party has rightly charged the aforesaid amounts from the Complainant and there is no illegality therein.  In support of his contention, he referred to Note 2 of Clause (VIII) of Brochure under “Price & Mode of Payment” where it was clearly mentioned that the price indicated for a typical unit may vary for non-typical units i.e. for a corner unit. In this backdrop, we are of the concerted opinion, since the Complainant was allotted a corner unit, thus, the charges of ₹42,008/- (₹35,600/- as cost + ₹6,408/- as GST) has rightly been charged from him for windows provided only to corner dwelling units. So far the question of charging ₹6,522/- towards ground rent on flat is concerned, to our mind, the same was payable by the Complainant as the dwelling unit was allotted to him on lease hold basis. Consequently, the relief prayed by the Complainant in the prayer clauses (c) and (d) of the Complaint cannot be granted to him and as such, the same are declined. 

 

18]              No other point, was urged, by the Ld. Counsel for the Parties.

 

19]              For the reasons recorded above, this complaint is partly accepted, with costs and the Opposite Party is directed as under:-

 

i.        To pay to the complainant, compensation by way of interest @9% p.a. starting from 10.06.2019 till 03.03.2020, on the amounts deposited by him, within a period of 30 days from the date of receipt of a certified copy of this order, failing which the entire accumulated amount (10.06.2019 till 03.03.2020) shall carry interest @12% p.a. from the date of default till this entire accumulated amount is paid to the complainant.

 

ii.       To pay to the complainant, a composite compensation to the tune of ₹1,00,000/- for poor quality of construction of the flat and for causing him mental agony & harassment and also for deficiency in providing service and adoption of unfair trade practice and cost of litigation to the tune of ₹30,000/- within a period of 30 days, from the date of receipt of a certified copy of this order, failing which the said amounts shall carry interest @9% p.a. from the date of default till realization.

 

20]              However, it is made clear that since the interest awarded by this Commission @9% p.a. at Sr. No.(i) above, is by way of compensation, therefore, the Opposite Party shall not deduct any TDS thereon. Similarly, no TDS shall be deducted by the Opposite Party on the compensation amount of ₹1,00,000/- awarded at Sr. No.(ii) above.

 

21]              Certified copies of this order be sent to the parties free of charge.

 

22]              File be consigned to Record Room after completion.

Pronounced

30^th May 2024                                                           

Sd/-

                                                        (PADMA PANDEY)

PRESIDING MEMBER

 

 

Sd/-

                                                        (PREETINDER SINGH)

MEMBER

“Dutt”