NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

 

 

FIRST  APPEAL  NO. 557 OF 2003

(From the order dated 28.5.03 in C.No.61/2000 of the State Commission, Haryana)

 

Brig. (Retd.) Kamal Sood              

Apartment No. W-112

Regency Park II

Phase IV DLF City

Gurgaon - 122 002                                             …      Appellant

 

Versus

 

M/s.DLF Universal Ltd.

Sansad Marg

New Delhi – 110 001.

Through its Managing Director                          …      Respondent

 

 

AND

 

FIRST  APPEAL  NO. 683  OF 2003

(From the order dated 28.5.03 in C.No.61/2000 of the State Commission, Haryana)

 

M/s.DLF Universal Ltd.

Sansad Marg

New Delhi – 110 001.                                        …      Appellant

 

Versus

 

Brig.(Retd.) Kamal Sood               

W-112  Regency Park II

DLF Qutab Enclave

Phase IV

Gurgaon - 122 002                                             …      Respondent

 

BEFORE :

 

                   HON’BLE  MR. JUSTICE  M.B. SHAH,  PRESIDENT

                   MRS. RAJYALAKSHMI  RAO,  MEMBER

 

 

For the Appellant          (in F.A.557/03) &         :         In person

For the Respondent (in F.A.683/03)      

 

For the Respondent (in F.A.557/03) &    :         Mr.A.N. Haksar, Senior

For the Appellant (in F.A.683/03)                      Advocate with Mr.

Aditya Narain,

Advocate

 

Dated the 20th April, 2007

 

 

O R D E R

 

M.B. SHAH, J., PRESIDENT

 

                   The main in questions which require consideration in the appeal are –

(i).     Can a builder give alluring advertisement promising delivery of possession of the constructed building/flat to the purchaser/consumer within the stipulated time, and, subsequently, on his failure, turnaround and contend that as governmental permissions, such as, approval of zoning plan, layout plan and schematic building plan,  were not given, the delay in construction should not be the ground for    grant of compensation to the consumer? And,

 

(ii).     Secondly, whether the consumer should suffer by paying escalation cost due to such delay?

 

                   In our view, it is unfair trade practice on the part of the builder to  collect money from the prospective buyers  without obtaining the required permissions such as zoning plan, layout plan and schematic building plan.  It is the duty of the builder to obtain the requisite permissions or sanctions such as sanction for construction, etc., in the first instance, and, thereafter, recover the consideration money from the purchaser of the flat/buildings.

 

                   Secondly, in such a case, if there is any express promise that the premises would be delivered within the stipulated time, and, if not done so,   escalation cost is required to be borne by the builder.

 

                   It is to be borne in mind that in most of the cases consumers invest their hard earned money, may be either retiremental benefits or their life savings to get shelter and in some cases, after retirement.  

 

                    In the present case, the Complainant is a retired Brigadier. He contends that his hard earned money was invested for purchase of a flat, and, that  he was compelled to pay escalation cost, despite delay in construction by the builder, and the promise made in the  colourful brochure published by the builder for attracting the buyer that no escalation cost would be recovered.

 

Case of the Complainant:

                        Brig.Kamal Sood, who was serving as Commandant 14 Gorkha Training Centre, Himachal Pradesh, approached the State Consumer Disputes Redressal Commission, Haryana, Chandigarh, by filing Complaint Case No.61/2000 contending that M/s.DLF Universal Ltd. (hereinafter referred to as the DLF) has indulged in unfair trade practice and there is deficiency in service on its part because there was delay in handing over possession of the flat as well as unjustified recovery of so-called escalation charges from the complainant.  He, therefore, sought direction that the DLF be directed, in all, to pay a sum of Rs.12,78,395/- to him, details whereof are given hereafter.

 

                    It was contended that the DLF published an advertisement for booking apartment in DLF Qutab Enclave.  As per the said brochure, the DLF was contemplating construction of apartments known as DLF Hamilton Court and DLF Regency Park.  As per the said brochure, the price for DLF Regency Park ranged from 8.05 lakhs to 13.77 lakhs.  There is a specific statement - “And remember, now all prices are ESCALATION FREE.  So, the price you book at is the price you pay, irrespective of what it might cost DLF”.   

 

                    It has been further stated in the said brochure as under:

 

“And both Hamilton and Regency come with a variety of payment plan options – from the Down payment option that carries an attractive rebate to a 2½ year interest-free plan to an exclusive 10 year option that makes home-buying a lot easier than it ever was

 

                    It has been pointed out that despite the aforesaid statement in the brochure, the DLF demanded an additional amount of Rs.4,02,617.69p. on the pretext of increase in the area, escalation charges, external electrification etc.  It is further alleged that the DLF made an offer to sell parking spaces in November 1993 at the cost of Rs.63,000/- to each allottee which was to be paid in instalment of Rs.22,000/- each.  The complainant paid the parking space cost within the stipulated time and was allotted the parking space.  Despite this, an additional amount of Rs.62,869/- was demanded by letter dated 4.3.1998 as extra charges for parking space which was already allotted to him.  It is also contended that at the time of delivery of possession in September 1999, the DLF demanded a sum of Rs.1,59,890/- for Stamp Duty and Registration Charges for the apartment and Rs.15,265/- for parking space.

 

                    Further, it is contended that the complainant had hired the services of Koshal & Associates (Architect Engineers and approved Valuers), who gave their report dated 12.7.2000 along with the site plan, which reads as under:

A.  (a)  Super area sold as per the agreement : 130.52 SM @  Rs.6728/- per SM

      (b) Super area as per physical measurements taking into account the

contents of the relevant clause of the agreement = 127.894 SM

(c)    Less Super Area given = 2.626 SM

(d)    Financial effect = Rs.17667.72

B   (a)  Carpet area to be given as per the agreement @ 87.412% of super area

              = 114.09 SM

(b)    Carpet area actually found provided after the physical measurements =

69.895 SM (The carpet area is calculated as per IS 3861-1975 clause

2.2 and 5).

 

(c)     Less carpet area provided : (114.09 – 69.895 Ό = 44.195 SM)

(d)     Financial effect : (44.195 x 6728) = Rs.297343-96

Net Financial effect : (17667.72 + 297343.96) = Rs.3,15,011.68 p.

 

                    On the aforesaid count, the complainant has claimed that he has suffered a loss of Rs.3,15,011.68p.  Finally, he has claimed the following reliefs:

            a)         refund of additional amount charged and               Rs. 4,02,617.19 p.

                        interest thereon @ 20% p.a. w.e.f. 3.5.99

                        to the date of refund.

 

            b)         refund of amount on account of lesser area           Rs. 3,15,011.68 p.

                        given with reciprocal interest thereon @ 20%

                        p.a. w.e.f. 3.5.99 to the date of refund

 

c)                  refund of amount charged on account of    Rs. 1,28,869.00 p.   

parking space, reciprocal interest thereon

@ 20% p.a. w.e.f. the date of payment of

each instalment i.e. November, 1993, Nov.

1994, Nov.1995 and March 1998 till the date

of refund.

 

d)                 Interest on a sum of Rs.1,75,150/- charged           Rs.    75,898.00 p.

For stamp duty @ 20% p.a. from Sep.1999

To Nov. 2001.

 

e)                 compensation for delay of 3 years in handing       Rs. 2,00,000.00 p.

over possession of the flat beyond stipulated

date.

 

            f)          Compensation for harassment                                Rs.    50,000.00 p.

                                                                                                            ______________

 

                                                                                    Total                Rs.12,78,395.87 p.

                                                                                                            ==============

 

Order of the State Commission:

                    The State Commission, after considering the facts held that:

 

(i).               as per the agreement between the parties the complainant was bound to pay Escalation Charges, and hence rejected the prayer for refund of the Escalation amount;

 

(ii).              Secondly, with regard to payment of interest for keeping the money which was recovered from the complainant for execution of the Conveyance Deed, the State Commission directed the DLF to pay interest at the rate of 10% p.a. on the amount deposited by the complainant from the date of deposit till the date of execution of the Conveyance Deed;

 

(iii).             Thirdly, for the differential carpet area, the State Commission held that the said dispute between the parties cannot be decided/sorted out in summary proceedings.

 

(iv).             Lastly, for delay of 3 years in delivery of possession, the State Commission awarded a lump sum of Rs.1 lakh as compensation.

 

                    Against that order, the complainant has preferred First Appeal No.557/2003; and, the DLF has preferred First Appeal No.683/2003.

 

                    We have heard the complainant, who is appearing in person and the learned senior counsel, Mr.A.N.Haksar, who is appearing for the DLF. 

 

 

Submissions:

                    Learned senior counsel, Mr.Haksar, submitted that –

                    Delay in construction was due to reasons beyond the control of the DLF.  For this purpose, he relied upon the statements made in Para-E of the Memo of Appeal (First Appeal No. 683 of 2003), wherein it has been stated as under:

 

(a).    There was a considerable delay on the part of the Government in granting sanctions, approvals and certificates in respect of the said project where, inter alia, apartment no.W-112, of the respondent herein was also situated; 

 

(b).    the Appellant had taken steps to get the Zoning Plan in respect of the said project approved and the Director, Town & Country Planning had approved the same on 24.8.1992 ; copy annexed and marked as Annexure - C. 

 

(c).    On 10.09.1993; the Appellant submitted, the layout plan along with detailed site plan and schematic building plan etc., for the said project; copy annexed and marked as    ANNEXURE-D.  

 

(d).    In response to certain queries and clarification sought by the Director, Town & Country Planning the  Appellant by letter dated 22.11.1993 furnished certain clarifications and explanations and once again sought approval of the layout plan; copy annexed and marked as ANNEXURE – E .  Thereafter, the Appellant by letter dated 07.03.1994 submitted the layout plan consisting of detailed site plans, schematic building plans etc., to the Director, Town & Country Planning for approval; copy annexed herewith and marked as ANNEXURE – F. The Director, Town & Country Planning by letter dated 02.08.1994 raised certain objections and pointed out certain deficiencies; copy annexed herewith and marked as ANNEXURE  – G. The Appellant herein by letter dated 03.08.1994 furnished certain clarifications and conformations in response to the above letter dated 02.08.1994; copy annexed herewith and marked as ANNEXURE – H.  The Appellant by letter dated 06.02.1995  enclosed the site plan and other relevant documents and drawings and requested the requisite approvals at the earliest; copy of the said letter dated 06.02.1995  is annexed herewith and marked as       ANNEXURE – I. 

 

(e).    The Director Town and Country Planning by letter dated 30.05.1995  granted approval of the building plans for the said project; copy of the letter dated 30.5.1995  is annexed herewith and marked as ANNEXURE – J.  

 

Thereafter, the Appellant herein also made an application on 28.9.1998 to the Director Town and Country Planning for obtaining the occupation certificate under Rule 47(1) of the Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Rules, 1965 ; copy annexed herewith and marked as Annexure – K.  It was after almost one year that the Director Town and Country Planning issued the occupation certificate on 10.9.1999 in respect of the said project; copy annexed herewith and marked as Annexure - L.

 

                    He further contended that:

 

                    (a)     Even, there was delay on the part of the complainant in paying the instalments;

 

          (b)   as per the agreement between the parties, the complainant was required to pay Escalation Charges; and

 

                    (c) for the Stamp Duty and Registration Charges, he contended that as soon as the complainant approached the DLF, the document was executed and hence the delay was on the part of the complainant and not on the part of the DLF. He also submitted that the order passed by the State Commission directing to pay interest on the said amount cannot be justified.

 

FINDINGS:

I.                 Delay in registering conveyance deed:                   

 

                    For the delay in registering the Conveyance Deed, we have to state that the submission made above by the learned senior counsel for the DLF is totally baseless and inconsistent with the submission made by DLF in its written arguments which were filed before the State Commission, wherein the DLF has admitted the delay and offered to pay interest thereon, as under:

“Charges for registration and stamp duty : These are statutory duties, which are payable under the Registration Act and the Stamp Duty Act.  The same have been paid by the respondent to the concerned authorities.  The complainant deposited Rs.1,49,890/- on account of flat and Rs.15,265/- on account of parking on 22nd November 1999.  The respondents sent a letter dated 3rd July 2001 requesting the complainant to come forward to execute the necessary documents.  The said documents were registered on 29th October 2001.  The respondent is ready to pay the interest @ 12% on the said amount, which comes to Rs.22,037/- for the flat and Rs.2100/- for the parking after deduction of TDS

 

                    In view of the aforesaid admission of its liability made before the State Commission, there is no substance in the contention now raised by the learned senior counsel for the DLF that the DLF is not bound to pay interest on the amount paid by the complainant for Registration and Stamp Duty of the Conveyance Deed.  Those written submissions were filed before the State Commission on 10.12.2002. 

 

                    In view of the aforesaid specific admission, there is no necessity to consider the allegation of the learned Senior Counsel Mr.Haskar  that there was some delay on the part of the Complainant.

         

                   Secondly,  we would state that undisputedly the stamp duty and the registration charges were collected by the DLF in November, 1999 and retained with it approximately for two years.  For that,  the DLF is bound to pay interest

                               

 

II.                Delay in delivery of possession of the flat:

(a).              Undisputedly,  there is delay of three years in handing over  the possession of the apartment to the Complainant.   The DLF was required to deliver the possession of the flat within a period of 2½ to 3 years from the date of the agreement.  For this purpose, it is undisputed that the complainant booked the apartment on 7.9.1993; agreement was executed between the parties on 18.10.1993; and,  as per the said agreement, the complainant was entitled to have possession of the flat in September 1996.  Admittedly, the possession was delivered on 24.11.1999. 

 

                   There is also no dispute that the complainant was required to pay the total consideration price within a period of 10 years.  It is the contention of the Complainant that despite having opted for ‘a ten year payment plan’ at the time of booking the apartment in the year 1993, the entire cost was paid within a period of six years and before taking possession of the flat in the year 1999.

 

(b).              Delay on the part of the Complainant in paying the instalments:

                    Learned senior counsel, Mr.Haksar, submitted that all throughout there was delay on the part of the complainant in paying the instalments.    Therefore, DLF is not liable to pay any compensation to the Complainant for delay in delivery of possession of the apartment.

 

                    In our view, this submission of the learned senior counsel is without any substance because the payment chart, which the DLF has produced on record, establishes beyond doubt that the complainant was punctual in payment of instalments as agreed.  The relevant chart is as under :

 

DELAYED  INTEREST  CALCULATION  REPORT  FOR  019  REGENCY  PARK

Customer Code : 5400269                               (    80064   )           BRIG  KAMAL  SOOD

Property Code :  W112

 

Interest Rate :       20.00                                      Grace  Period  :  0

 

Due Date

Amount

Due

Receipt

Date

Receipt

Amount

Days

Delay

Interest

Amount

07 Sep.1993

 

07 Nov.1993

 

07 Mar.1994

 

07 Jun.1994

30 Aug.1994

08 Sep. 1994

07 Mar.1995

 

 

 

07 Dec.1995

 

07 Mar.1996

 

07 Jun.1996

 

07 Sep.1996

 

07 Dec.1996

 

07 Mar.1997

 

07 Jun.1997

 

07 Sep.1997

07 Dec.1997

 

07 Mar.1998

 

 

 

07 Mar.1998

 

07 Sep.1998

 

07 Dec.1998

03 Mar.1999

87807

 

100076.00

 

12269.00

 

12269.00

1.00

12269.00

87087.00

 

 

 

43904.00

 

43904.00

 

32344.00

 

32344.00

 

32344.00

 

32344.00

 

32344.00

 

32344.00

32344.00

 

32344.00

 

 

 

32344.00

 

32344.00

 

32344.00

32344.00

 

07 Sep.1993

 

02 Nov.1993

 

11 Mar.1994

11 Mar.1994

11 Mar.1994

11 Mar.1994

11 Mar.1994

08 Jun.1994

05 Sep.1994

15 Dec.1995

15 Dec.1995

23 Apr.1996

23 Apr.1996

18 Jul.1996

18 Jul.1996

13 Sep.1996

13 Sep.1996

04 Feb.1997

04 Feb.1997

18 Mar.1997

18 Mar.1997

10 Jun.1997

10 Jun 1997

18 Sep.1997

18 Sep.1997

 

17 Dec.1997

 

12 Mar.1998

 

16 Mar.1998

16 Mar.1998

14 Sep.1998

14 Sep.1998

25 Dec.1998

25 Dec.1998

03 May 1999

 

87807.00

 

100076.00

 

12269.00

12269.00

1.00

12269.00

63268.00

12269.00

12269.00

1.00

43903.00

1.00

43903.00

1.00

32343.00

1.00

32343.00

1.00

32343.00

1.00

32343.00

1.00

32343.00

1.00

32344.00

 

32344.00

 

32343.00

 

1.00

32343.00

1.00

32343.00

1.00

32343.00

 

0

 

0

 

4

0

0

0

0

0

0

283

8

138

47

133

41

98

8

150

59

101

11

95

3

103

11

 

10

 

5

 

101

9

99

7

109

18

 

0.00

 

0.00

 

26.89

0.00

0.00

0.00

0.00

0.00

0.00

0.16

192.45

0.08

1130.65

0.07

726.61

0.05

106.33

0.08

1045.61

0.06

194.94

0.05

53.17

0.06

194.95

 

177.23

 

88.61

 

0.06

159.50

0.05

124.06

0.06

319.00

Total Interest Due                                        4540.79

 

Balance Interest Due                                       4540.79

 

Total Interest on Delayed Payment                                       5551.00

 

 

          From the aforesaid chart, it can be stated that up to 7.12.1995, the complainant had paid a large amount without there being any delay.  Further, it appears that for insignificant amount of Re.1 the builders found that there was delay in paying the same and for that they have mentioned the period.  In our view, such submission is required to be ignored and we would state that it is part of unfair trade practice.  In any case, for the aforesaid large sum, the delay was so negligible that even the builders have charged maximum Rs.5,551/- as interest.  Considering this aspect, it cannot be said that there was any substantial delay in payment of instalments.

 

(c).              Delay in obtaining various sanctions:

                    However, learned senior counsel, Mr.Haksar, pointed out that the delay was due to obtaining sanctions for various plans, including the lay out plan, zoning plan, and that the approval of building plan for the project was finally sanctioned on 30.5.1995.

 

                    In our view, before obtaining statutory clearances, such as, sanction for construction and approval of Site Plan and other relevant documents, if the builder issues tempting advertisement or promises to deliver the possession of the constructed flat within 2½ years to 3 years, then the fault lies with the builder. 

 

                    In this case, the Complainant had applied for allotment of the flat in September 1993, and the agreement, i.e. Apartments Buyers Agreement was executed in October 1993. 

 

                    Normally, delay in construction of building may arise because of various reasons.  But, in our country, it is known fact that delay occurs  in obtaining various permissions from different governmental authorities, and this fact is well-known to  the builder.   The time normally taken in getting such permissions could have been contemplated by the builder before issuing the brochure.  It would be unfair trade practice, if the builder, without any planning and without obtaining any effective permission to construct building/apartments, invites offers and collects money from the buyers. If the construction of the building/apartment is delayed, because of such delay, and  the possession of the apartment is not delivered within the stipulated time, the builder would be liable to bear the escalation cost and not the buyer/consumer.

 

          For this purpose, it would be worthwhile to mention some discussion   made in  HUDSON’S Building and Engineering Contracts, 7th Edition, which deals with  commencement of the work by the Public Authority including Private Corporations.  Therein, it has been  observed:

 

“…..Many large contracts let prematurely by private property developers suffer from similar deficiencies of administration, which can be grossly unfair to the contractor and make effective pre-planning on his part very difficult. On the other hand, very similar results can also occur in both public and private projects for the quite different reason that it is a common practice of contractors  whose resources are fully employed elsewhere to see to conclude new contracts prematurely in order to maintain an uninterrupted flow of work, with the result that the start of work on a later project is in such cases likely to be largely cosmetic until earlier projects are nearer completion.

 

(Page No. 456, Para 3.069)

 

                   It is further discussed:

 

“……… The ideal is a contract put out to tender with a stated and realistic date for starting work, sufficiently distant in time to enable all parties to plan and be ready for an effective start when the date arrives.” (p.457)

 

                   Hence, in our view,  it was the duty of the DLF to plan in advance, obtain necessary permission and thereafter promise to deliver the  possession of the flat/apartment  within the stipulated time.  As stated above,  if that is not done, delay in obtaining permission would hardly be a ground for directing the consumer to suffer.

 

                    Next, learned Senior Counsel Mr.Hakasr contended that as per the terms of the agreement the Complainant is bound to pay escalation cost, and, for delay in delivering possession, Complainant will not be entitled to claim any compensation.  He relied upon the following terms of the agreement  entered into between the parties on 19th October, 1993, which according to him deals with escalation cost and for delay in delivery of possession of the apartment. 

 

                    Relevant terms of Clause 4 and 16 are as under:

 

“Cl.4: The price of the apartment stipulated hereinabove is based on the price of all materials and labour charges pertaining thereto ruling on 1st day of January, 1993. If, however, during the progress of work, there is increase in the price of the materials used in the construction work and or labour charges on account of any reason statutory or otherwise, the cumulative effect of such increase as assessed by the Company and intimated to the Apartment Allottee shall be debited to Apartment Allottee’s account who shall pay the same on demand. The decision of the Company in this respect shall be final and binding on the Apartment Allottee. The increased incidence may be charged  and recovered by the Company from the Apartment Allottee with any one or more of the instalments or separately but in any case before giving possession or deemed possession of the Apartment.”

 

                   Cl. 16:        That the possession of the said premises is proposed to be delivered by the Company to the Apartment Allottee within two and half/three years from the date of booking of the Apartment. The Company shall not incur any liability if it is unable to deliver possession of the said premises by the time aforementioned. If the completion of the building(s) is delayed by reason of non-availability of steel and/or cement or other building materials, or water supply or electric power or slow down strike or due to a dispute with the construction agency employed by the Company, civil commotion or by reason of war or enemy action, or earthquake or any act of God or if non-delivery of possession is as a result of any act, notice, order, rule or notification of the Government/or any other public or competent authority or for any other reason beyond the control of the Company and in any of the aforesaid events the Company shall be entitled to a reasonable extension of time for delivery of possession of the said premises. 

                  

                             The Company as a result of such a contingency arising reserves the right to alter or vary the terms and conditions of allotment or if the circumstances, beyond the control of the Company so warrant, the Company may suspend the Scheme for such period as it may consider expedient and no compensation of any nature whatsoever can be claimed by the Apartment Allottee for the period of suspension of the scheme.

 

                             In consequence of the Company abandoning the scheme, the Company’s liability shall be limited to the refund of the amount paid by the allottee without any interest or any other compensation whatsoever.”

 

                    From the aforesaid terms of the contract, it is clear that Clause 16, quoted above, firstly provides that from the date of booking the Company shall deliver the possession of the Apartment within two and half to three years.

 

 

                   Secondly, in cases of non-availability of steel, cement, or other building materials, or water supply or electric power or slow down strike, etc. or due to act of God, such as earthquake, etc., or for the reasons beyond the control of the Company, the builder (Company) would be entitled to reasonable extension of time for delivery of possession of the said premises.

 

 

                   This clause, in our view, would not apply to the cases of delay in obtaining necessary permissions for construction of the buildings. In this case, the delay is in no way connected with the non-availability of steel, cement, etc. nor it is the act of God, such as earthquake. As such, it was default on the part of the builder in not obtaining such permission in advance before issuing advertisement inviting the buyers to purchase the apartments and before collecting money.  Therefore, the reliance placed upon the said clause is without any basis.

 

 

.III.            Escalation amount:

(a).              Now, escalation, Cl.4 provides that in case of increase of costs, during the construction period, which were prevailing on 1.1.1993, then the Company would be entitled to levy escalation charges from the allottee.

 

                    But, this condition is also on the foundation that construction work was to start in the year 1993 and not in the year 1996, i.e. after obtaining various sanctions to construct the buildings. Therefore, this clause cannot be the basis for holding that purchasers are required to pay escalation in cost of construction. Delay in starting construction work might have resulted in increase in the price of the materials used in the construction work or labour charges. For this delay, the Complainant is not responsible, and, therefore, he is not required to pay the escalation charges due to such delay.

 

(b).              Further, this clause is to be read along with the promise given in the brochure. It is settled law that brochure is part of the promise on which the contract is based. In the brochure it has been specifically mentioned that:

 

“And remember, now all prices are ESCALATION FREE.  So, the price you book at is the price you pay, irrespective of what it might cost DLF”.

 

                   The brochure issued by the Opposite Party which has bearing in deciding  whether  escalation in cost is to be  borne by the Complainant.  Dealing with the case of Ghaziabad Development Authority Vs. Union of India, (2000) 6 SCC 113, the Apex Court considered the term of the brochure that the  Development Authorities shall not be liable to pay any interest in the event  of occasion arising for  return of  amount and held as under:

 

“The rate of interest awarded in equity should neither be too high nor too low. In our opinion awarding interest at the rate of 12 per cent per annum would be just and proper and meet the ends of justice in the cases under consideration. The provision contained in the brochure issued by the Development Authority that it shall not be liable to pay any interest in the event of an occasion arising for return of the amount should be held to be applicable only to such cases in which the claimant is itself responsible for creating circumstances providing occasion for the refund. In the cases under appeal the fault has been found with the Authority. The Authority does not therefore have any jurisdiction for resisting refund of the claimant’s amount with interest”.

 

                   Therefore, it cannot be said that   the  condition contained in the contract   would only  prevail and not the terms of the brochure  which is an alluring promise  given by  the  builder.  If the contention of the learned counsel for the  DLF is accepted that the terms of the agreement would prevail and not what is stated in the brochure,   then  it would amount to misleading advertisement  with false promise to  lure the  needy prospective buyers.   This would also be unfair trade practice as provided under Section 2(1) (r ) of the Consumer Protection Act.  Such brochure also gives undue advantage to the builder vis-ΰ-vis other builders. Hence,  the said  contention cannot be accepted.

 

                    In any case, in the present case, the builder is not entitled to have escalation charges because admittedly there was delay in starting construction for no fault of the consumer/buyer of the Apartment. Therefore, the recovery of Rs.4,02,617.69p., from the Complainant under the threat of cancellation of allotment is totally unjustified. 

 

(c).              Lesser area:

                    For the lesser area as contended in the complaint, the State Commission has held that it would be open to the Complainant to approach civil court. We do not think that this would be a fit case for interference at this stage, because the relevant evidence is not led by the parties on the said aspect and the Complainant has not raised any contention in support of this ground. Hence, if the Complainant has any grievance on this ground, it would be open to him to approach the Civil Court.

 

(d).              Delay in delivery of possession of parking space:

                    With regard to parking space, admittedly the Complainant has paid the amount for parking space. No doubt, there was delay in allotting the parking space and the Complainant is entitled to get some relief. But, in our view, the relief  granted by way of refund of the escalation cost, would meet the grievance of the Complainant.

 

Conclusion:

                    In view of the aforesaid findings for  delay in delivering the possession to the Complainant, the State Commission awarded Rs.1 lakh as compensation.  Considering the fact that we are directing the builder to refund the amount recovered on account of escalation, costs, the said amount would  compensate the Complainant properly.

 

                    In the result, the appeal No.557 of 2003  filed by the Complainant is partly allowed and the Respondent DLF is directed:

 

(a)               to refund the amount of Rs.4,02,617.69p. to the Complainant which is recovered  on account of escalation cost, with interest at the rate of 12% p.a. [No doubt, the Complainant has claimed the refund with interest at the rate of 20%, because that was the rate at which the builder recovered from the Complainant for  some delay in payment of instalment.];

 

 (b)             to pay Rs.1 lakh as compensation  to the Complainant for delay in delivery of possession, as directed by the State Commission; and,

 

(c).              to pay interest at the rate of 12% p.a. on the amount deposited by the Complainant for the execution of the Conveyance Deed, from the date of deposit till the date of conveyance of the deed.

 

                    In view of the aforesaid order Appeal No. 683 of 2003 filed by the DLF is dismissed.

 

                    There shall be no order as to costs in both the appeals.

Sd/-

…………………………………J.

( M.B.SHAH )

PRESIDENT

 

Sd/-

.…………………………………..

( RAJYALAKSHMI RAO )

MEMBER