PER SUBHASH CHANDRA

1.     This appeal under Section 51(1)(i) of the Consumer Protection Act, 2019 (in short, the ‘Act’) challenges the order dated 28.10.2021 of the State Consumer Dispute Redressal Commission, Uttar Pradesh, Lucknow (in short, the ‘State Commission’) in Consumer Complaint no. 407 of 2017 allowing the complaint filed by the respondent.  

2.     The relevant facts of the case, in brief, are that the appellant is a local urban development authority which had devised and promoted a residential housing scheme, “Registration of Madhuban Bapudham Flats Scheme” with the scheme code 818 for 2 BHK Type II flats to be allotted by way of draw of lots. The respondent registered for the scheme by depositing the requisite fee of Rs 36,000/- on 04.09.2012 and being successful in the draw of lots, was allotted vide allotment letter dated 24.12.2012 Flat No. Golden Berry 401 at a cost of Rs 36,00,000/-. A 5% discount was provided to the respondent under the scheme for 100% upfront payment. According to the appellant, this price was not final and vide letter dated 01.08.2017 the respondent was informed that the price of the flat inclusive of exclusive covered car parking was Rs 39,60,000/- and was asked to deposit the balance amount of for the registration of the sale of the flat. After considering the Rs 36,00,000/- already paid, a demand of Rs 3,60,000/-, lease rent of Rs 55,202 and parking charges of Rs 2,50,000/- was raised with the condition that failure to do so would attract penalty of Rs 1200/- per month. The respondent approached the State Commission seeking cancellation of this demand on the grounds that the full payment had been made by the respondent and that this fresh demand was arbitrary and unjustified. The State Commission allowed the complaint on contest and directing payment of simple interest @ 9% on the amount deposited by the respondent since the date of filing of the complaint till execution of sale deed/handing over possession in the form of compensation. This order is impugned by way of this appeal with the prayer to:

(a)    Call for the records and accept the first appeal by setting aside the limited order dated 28.10.2020; and

(b)    Pass such other order/orders as this Hon’ble Commission may deem just and proper in the facts and circumstances of the case.

3.     We have heard the learned counsel for the parties and given thoughtful and careful consideration to the material on the record.

4.     The order of the State Commission that is impugned before us reads as under:

“Thus, on perusal of whole documentary evidence available on record it prima facie establishes that a lawful contract was executed between complainant and Ghaziabad Development Authority and while depositing the amount in the perspective of significant information of Madhuban-Bapudham scheme referred by the Authority, complainant availed benefit of 5% exemption as per rules. On 24.12.2012 Authority issued  allotment letter/schedule of payment to her. While making payment in lump sum complainant made her residual amount zero as has been admitted by Authority itself in their letter dated 06.01.2017. Thereafter, on 01.08.2017 one more demand letter was issued which amounts to violation of the contract and amounts to violation of the rules given by the Authority itself in the Brochure also. On perusal of the whole material on record, evidence and keeping in mind basic facts of the contract, Commission arrives at the conclusion that having deposited the amount of allotment as per demand raised by the opposite party as per rules, complainant availed benefit of exemption and now after allotment of flat no right remains with Authority to enhance the price of the flat arbitrarily, ex parte about the allotted flat and to raise demand of parking charges. Therefore, the stated demand notice issued by the authority is contrary to law, ex parte and arbitrary which is violation of their own rules. Complainant has proved her submissions and evidence adduced by her corroborates the same. In such a situation, complaint of complainant filed against opposite party is entitled to be decreed.

Order

Complaint of complainant is decreed against opposite party. Demand letter dated 01.08.2017 issued by the opposite party is cancelled being contrary to law. Opposite party is ordered that having executed sale deed in favour of complainant about flat number Golden Berry 401 according to conditions of Brochure without recovering any additional payment/ interest hand over the same to complainant along with all the documents/papers. Subsequently, opposite party would pay simple interest @ 9% per annum on the amount deposited by the complainant since the date of filing complaint till execution of sale deed/handing over possession in the form of compensation. Opposite party would pay Rs 10,000/- as the cost of the complaint.”

5.     The contention of the appellant is that the impugned order has arbitrarily cancelled the demand letter dated 01.08.2017 and directed it to register the sale deed without recovering the additional payment and imposed interest by way of compensation to be paid to the respondent. It is submitted that the State Commission has erred in wrongly interpreting the letter dated 06.01.2017 that there was “No Dues” against the final cost of the flat whereas it was only a “No Dues” letter towards the estimated/tentative cost of the flat and for the respondent to mortgage the flat if desired. It is also submitted that the respondent was aware that the cost of Rs 36,00,000/- paid by her was an estimated cost and that the demand letter dated 01.08.2017 for the additional amount with lease rent and parking charges was a valid demand. It was argued that the matter was covered by the judgment of this Commission in Kartar Singh Vs. Delhi Development Authority, I (2008) CPJ 93 (NC) and Commissioner, Gujarat Housing Board & Anr. Vs. Thakkar Somalal, II (1996) CPJ 90 (NC) relating to the fixation of the cost of the property and was therefore beyond the scope of the Act. Reliance was also placed on the judgment of the Hon’ble Supreme Court in Municipal Corporation, Chandigarh Vs. Shantikunj Investment (P) Ltd., (2006) 4 SCC 109 and UT Chandigarh Administration Vs. Amarjeet Singh, (2009) 4 SCC 660 that held that allottees were liable to pay interest, penal interest, and penalty for delay in payment of instalments. The appellant relied upon the judgment of the Hon’ble Supreme Court in Prashant Kumar Shahi Vs. Ghaziabad Development Authority, (2000) 4 SCC 120 and this Commission’s judgment in Meerut Development Authority Vs. Uma Khandelwal dated 27.06.2016 to contend that the respondent as a defaulter in payments had no right to maintain the complaint before the State Commission. It was contended that the Brochure of the scheme had stated clearly that the price was tentative and that the decision of the Vice Chairman would be final. The appellant therefore contends that there has been no violation of the contract between the parties on his part and that the State Commission failed to consider that it was not a profit-making entity which follows costing practices of the Government on the basis of actuals.

6.     On behalf of the respondent, learned counsel submitted that the Brochure for the scheme had stated in para no. 3.50 that the cost of the flat was as per Table No. 1 and provided vide para 6.40 a One Time Payment Discount of 5% if the full payment for the flat was made in one instalment and as the respondent had paid the entire amount in one instalment, the appellant had provided it with this discount. Therefore, the contention that the price was approximate and that the respondent was liable to pay the balance as per the demand letter dated 01.08.2017 was incorrect. The appellant had also issued a letter dated 06.01.2017 indicating “No Dues” payable by her towards the flat and therefore the demand was not justified and had been rightly set aside by the State Commission vide the impugned order. It was contended that the appellant had erred in seeking the payment of Rs 3,60,000/- before registration of sale deed and handing over of possession was contrary to the terms of the Brochure which was the basis for allotment.

7.     From the foregoing it is manifest that under the scheme of allotment of flats, allottees were indeed provided an option to pay the entire cost in one instalment and were eligible to receive a 5% discount in case they made the payment. It is not in dispute that the respondent made the full payment of Rs 36,00,000/- towards the flat as indicated for the category of the flat in Table 1. It is also evident that a “No Dues” letter was issued to the respondent by the appellant on 06.01.2017 with regard to the payment for the flat permitting the allottee/respondent to mortgage the flat. Therefore, the demand letter dated 01.08.2017 asking the respondent to pay a further amount of Rs 3,60,000/- is contrary to the scheme of the appellant itself whereby not only was a discount provided on full payment but a “No Dues” certificate was also issued with regard to the payment towards the consideration of the flat in question. If the payment made was to be considered to be only an approximate cost paid, the appellant should not have permitted the mortgaging of the property by the respondent. The contention of the appellant that the price was fixed as per the Government’s policy of recovery of actual cost and that the decision of the Vice Chairman was final cannot be accepted since the acceptance of the payment of Rs 36,00,000/- was not qualified by any such condition nor was it made known to the respondent that the payment was not the entire sale consideration or that it was subject to a further demand. The price indicated in Table 1 was also not mentioned as approximate. In fact, the issue of a “No Dues” certificate gave the payment a finality with regard to the issue of payment of the sale consideration. The demand raised on 01.08.2017 cannot be justified or sustained in view of this. Furthermore, the terms and conditions of the allotment of the flat under the scheme as per the Allotment Letter constitutes a contract between the Ghaziabad Development Authority and the respondent. The Hon’ble Supreme Court has held in its judgment in Bharati Knitting Company vs DHL Worldwide Express Courier Division of Airfreight Ltd., (1996) 4 SCC 704 decided on 09.05.1996, that a contract between the parties is binding between the parties.  

8.     The appellant is bound by the terms of the contract and cannot now claim otherwise. It is evident that the terms of payment, which incentivized payment in full by those desirous of availing a 5% rebate, also provided the option to those who wished to pay in instalments and provided for penal interest for delayed payments, as seen from paras 6.40 and 6.50 of the brochure. Having offered a scheme of payments that was availed by the respondent, it would be grossly unfair to require her to again pay the appellant a further sum of money merely because it had not worked out the cost earlier. Having received a substantial amount of Rs 36,00,000/- the act of further demanding Rs 3,60,000/- or 10% of the sale consideration failing which making the respondent liable to pay Rs 1200/- per month also amounts to an unfair trade practice under section 2 (1) (r ) of the Act. It is not material that the appellant is an Authority under the Government. The fact that it is offering a scheme for housing to members of the public, including primarily the economically weaker sections, casts upon it the added responsibility of completing its due diligence with greater care prior to the announcement of the scheme. It must be borne in mind that the ability of applicants under schemes of the Government/ its authority to pay the price for a residential unit is limited and the reason why they apply for housing under government schemes and not with colonizers and private developers. Asking for additional payment after collecting the full payment with a 5% discount is an abuse of dominant position and an unfair trade practice and must be categorized as such, even if it is by a Development Authority. The Authority, it must be remembered, derived the benefit of the availability of the funds deposited in a lumpsum by the respondent from the date of deposit till the date of construction. The demand raised cannot be justified on this ground as well.

9.     The ground taken by the appellant that the moot issue in this case is that of the pricing of the flat in question which has been held by the Hon’ble Supreme Court in Shantikunj Investments (supra) and Amarjeet Singh (supra) to be beyond this Commission’s ambit has been considered. The issue in the instant case is clearly not one of costing of the flat but of whether the full amount as demanded by the Authority at the time of allotment was paid in full or whether a further demand could be raised. The Appellant has at no stage intimated the respondent through a notice conveying change in the price or sale consideration on grounds of enhancement of material costs, plans necessitating revision of costs due to increase in built up area, change in specifications warranting revision of price, etc. Hence its reliance on the cases cited is of no avail to the appellant.

10.   As for the reliance of the appellant on Prashant Kumar Shahi (supra) and Uma Khandelwal (supra) that the respondent being a defaulter cannot claim relief before the State Commission, in view of the fact that the respondent had been issued a “No Dues” certificate by the Authority itself with regard to the payment of sale consideration for the flat in question as early as 06.01.2017, it is not open for it to take this argument at this stage. This contention does not sustain and must be rejected.

11.   As regards the quantum of compensation to which the respondent is eligible, in Wg Cdr Arifur Rehman Khan and Aleya Sultan and Ors. Vs DLF Southern Homes Pvt. Ltd. in Civil Appeal No. 6239 of 2019 decided on 24.08.2020, it was laid down by the Hon’ble Supreme Court that compensation for delay in handing over possession @ 6% is fair and just compensation. Respectfully, following this judgment, compensation @ 6% is considered appropriate in this case.

12.   For the foregoing reasons, the order of the State Commission directing the setting aside of the demand letter cannot be faulted. Accordingly, the appeal is liable to fail. We, therefore, uphold the direction of the State Commission to set aside the demand letter dated 01.08.2017 directing the payment of Rs.3,60,000/-. The direction to the Authority to register the sale deed and to hand over the required documents to the respondent are also upheld as a logical direction. However, as regards the payment of compensation @ 9% awarded, we consider it necessary to amend the State Commission’s order and to direct that this order shall be complied with within 4 weeks failing which, the Authority shall be liable to hand over possession with a delay compensation of 6% p.a. simple interest from the date of this order till registration of the sale deed and handing over of possession complete in all respects.