In this complaint filed under Section 36-A of the Monopolies and Restrictive Trade Practices Act, 1969 (for short, the Act), the complainant has made the following prayers :- (a) quash the extra charges levied by the Respondent vide letters dated June 2, 1997 and August 27, 1997, and further restrain the Respondent from claiming any amount except for stamp duty on execution of sale deed at the time of handing over possession of the Apartment; (b) restrain the Respondent from canceling the allotment of the Apartment No.1302A, DLF Baverly Park, Gurgaon, Haryana and Shop No.B-248 DLF Supermart, 1 DLF Qutab Enclave, for non-payment of the extra amount sought from the Applicant vide the letter of June 2, 1997 and August 27, 1997;
c) direct the Respondent to pay interest @ 24% p.a. on Rs.23,79,449/-
i.e. the amount deposited as the sale price for the apartment, from December 1995 and on Rs.2,33,609/- i.e the first installment of the additional amount demanded that was paid under protest, from July 28, 1997, till the date of handing over the possession of the Apartment to the Applicant;
d) direct the Respondent to pay interest @ 24% p.a. on the entire sale price paid for the shop from the date final payment was made till the date possession is handed over to the Applicant;
e) direct the Respondent to hand over possession of the Apartment No.1302A, Beverly Park, Gurgaon, Haryana and the shop No.B-248, DLF Supermart, DLF Qutab Enclave Complex Gurgaon, to the Applicant forthwith;
f) direct the Respondent to pay a sum of Rs.15,00,000/- towards liquidated damages for the financial loss, injury and undue hardships caused to the Applicant as a result of delay in handing over of possession as this delay has resulted in loss of rental income;
g) enquire into the unfair trade practices adopted by the Respondent and correct the same by passing appropriate orders and direct the Respondent to desist from such action in the future;
h) declare the restrictive clauses in the Agreement as null and void and declare the practices adopted by the Respondent as unfair and restrictive;
i) pass such other or further orders or directions as this Honble Commission may deem just and proper in the facts and circumstances of the case and in the interest of justice; and,
j) award legal costs.
2. Along with the complaint, the complainant filed an application under Section 12-A of the Act. That application was disposed of by the erstwhile Monopolies and Restrictive Trade Practices Commission (for short, the Commission) by a detailed order dated 25.09.1998, the relevant portions of which reads thus :- By this common order application under Section 12A of the Monopolies and Restrictive Trade Practices Act (for brief the Act) filed by 12 complainants, as indicated in the title, against the same respondent, viz., DLF Universal Ltd., New Delhi are disposed of as the issues involved and the prayers of the complainants in the applications are similar. In all these cases the Notices of Enquiry (NOE) under Section 36B(a) read with 36D of the Act alleging indulgence in unfair trade practices on the part of the respondent falling under Section 36A of the Act have been issued. The facts as contained in the complaints in all these cases can be broadly summed up as below :- The complainants have entered into an apartment buyers agreement or a commercial complex buyers agreement or both with the respondent. The agreements specified area of the apartments or commercial space and the total sale price based on price per sq. meter. The said properties are located in Baverly Regency Park, DLF Kutab Enclave, Gurgaon. The possession was to be delivered within 2-1/2 to 3 years from the date of booking. While the possession was expected around the end of 1995, the respondent by communication dated April 21, 1997 and 2nd June, 1997 demanded additional payment as extra costs to the extent of approximately 30 per cent of the original sale price in respect of an apartment on account of
1. Increase in super area
2. Escalation charges on material and labour and
3. External electrification and fire fighting systems For example, in respect of an apartment whose original price was Rs.23,79,449/- the extra charges amount to Rs.9,34,435/- and corresponding figures for a commercial space were Rs.6,45,374/- and Rs.2,80,470/- According to the complainants the action of the respondent in delaying the handing over of possession of the apartment/ commercial space and asking for extra charges over and above the amount contracted for constitute to unfair and restrictive trade practices. Interim applications under Section 12A of the Act have been filed by all complainants praying for inter alia restraining the respondent from cancelling the allotted apartments/ commercial space and staying the extra charges. The respondent filed a reply to the interim applications of the complainants in which the following main points have been made :-
1. The complainants have not disclosed the fact that the extra charges were in accordance with and in terms of the specified clauses of the flat buyers agreements dated 30-6-1993 and commercial complex buyers agreement dated 1-7-1993. The cost on account of the increase in the super area was in terms of the preamble and clause 15 of the agreements. The escalation charges on material and labour were in terms of clause 4 of the agreements. The extra charges for the external electrification and fire fighting system were in terms of clause 2(b) of the agreements.
2. Since delay in giving possession of the premises is contemplated under the agreements and the extra charges to be paid by the complainants are in terms of the agreements, the question of any unfair trade practice on the part of the respondent does not arise. We heard Ms. Malavika Rajkotia, Shri Lalit Badhwan, Shri Vijay Sondhi and Ms. Anjana Bali, advocates on behalf of the complainants whom they represent and Shri Ravinder Narain, senior advocate on behalf of the respondent. Shri Ravinder Narain argued that when a person signs a document containing certain specific contractual terms, he is bound by the contract and no unfair trade practice is involved in the respondents action in demanding extra charges in accordance with the contract. He drew our attention to clause 18 of the contract which provides that in case the respondent failed to deliver possession of the premises to the allottee within the time specified in the contract, the allottee was entitled to terminate the agreement in which event the company was to refund the earnest money and any further amount received by it without any further liability on its part. In view of this the complainants cannot ask for any relief not provided in the contract. He cited the judgments of the Supreme Court of India in Bharati Kintting Company versus DHL Worldwide Express (1996) IV Supreme Court cases 704 delivered on 9th May, 1996 to support his contention that the complaints are not maintainable. Shri Ravinder Narain, senior advocate for the respondent, also took us through the various provisions of the agreement specially clauses 2(b), 4, 11, 15, 16 and 18 of the agreements. The justification for the demand of extra costs as explained by him is summarized below.- The area determined at the time of booking of the apartment was tentative and approximate and subject to changes as stipulated in the preamble and clause 15 of the agreement. The increase in area has been necessitated by items like the introduction of the third lift in each area, provision for space for laundry facilities in the basement and enhanced public spaces by having larger entries for lobbies. The additional area also is due to the area allocated for recreation activities like swimming pool and gymnasium. Clause 4 of the agreement provides for escalation charges due to increase in price of materials during the progress of work. Since handing over possession of the apartment/commercial space has been delayed even beyond three years due to reasons beyond control, the increase in cost only up to June, 1996 is being passed on to the allottees. Any escalation beyond that date is borne by the respondent itself. Clause 2(b) of the agreement very clearly provides that the cost of provision of external electrification and fire safety measures is to be borne by the allottees. The cost of internal wiring of switches etc. within the apartments is not included in the extra changes. The claim for extra charges on this account should be seen in the context of substantially higher provision of load to allow the residents to install full range of electrical appliances including air conditioners and to ensure uninterrupted power supply. The respondent has ensured statutory fire safety standards in modern high rise buildings. The advocates representing the complainants argued that there was no information regarding the total super area approved for the building as per the plan and how it has been proportionately divided amongst different allottees. During the course of their arguments they clarified that they did not question the right of the respondent to levy extra charges strictly in terms of the clauses of the agreement. According to them the increase in the super area has been occasioned by provision of facilities like club, swimming pool, third lift etc. to which the allottees never consented nor are they essentially required. The cost of electrification has been increased due to installation of
24 hour electricity back up and DG sets. Extra charges to provide for additional expensive facilities were beyond the scope of the contract. The delay in construction was totally due to the respondent's failure to begin and end the project in time and therefore escalation charges should be borne by the respondent. We have carefully examined the materials placed before us and given due consideration to the arguments advanced. We are not in agreement with the views expressed by the senior advocate for the respondent that the complaints are not maintainable in the light of the judgement of the Supreme Court in Bharati Knitting Company versus DHL Worldwide Express Ltd. In these cases the question of the complaints asking for any damages from the respondent beyond the contracted liability does not arise. The complainants have also not disputed the validity of the clauses of the contract. Their complaint is that the respondent delayed construction of the project resulting in imposition of unjustified costs on them and extra charges falling outside the scope of the contract are being claimed by the respondent taking advantage of the provisions of the contract. The action on the part of the respondent, according to the complainants, fall within the definition of Section 36A of the Act which frowns upon adoption of unfair method and or unfair and deceptive practice in the course of pursuit of any trade or service. The Commission have already issued a NOE to the respondent after it is satisfied that there is a prima facie case for enquiry. We do not consider it necessary to review this decision at this stage when we are considering the application under Section 12A after issue of NOE. We, therefore, reject the contention of the senior advocate for the respondent that the complaints are not maintainable. Shri Ravinder Narain, senior advocate for the respondent pointed out that as per clause 13 of the agreement, the respondent could at its sole discretion make variations, additions, alterations and modifications to the plans, designs and specifications for the apartments and under this clause the consent of the allottees to these were available. The increase in super area was necessitated by the various items like the introduction of third lift, provision for space for laundry facilities and enhanced public spaces as well as provision for recreation facilities like swimming pool, gymnasium and club. These have actually resulted in the increase in the super area only to a marginal extent around 10 sq. meters on an average. We also find that the amount of extra charges in all these complaints on account of increase in super area amounts to approximately on an average 10 per cent of the extra charges. It was emphasized by Shri Ravinder Narain that the respondent has demanded escalation charges as per clause 4 of the agreement only for increase in prices up to June, 1996 i.e., for the originally contracted period and any increase in cost beyond that date has been absorbed by the respondent itself. It was permissible under the agreement for the respondent to charge for increase in prices during the progress of work. The complainants are, however, of the view that that the construction work was started late due to inaction on the part of the respondent and as such the respondent has no right to charge the allottees on this account. The increased demand on account of escalation charges, we find amounts to approximately 45 per cent of the total extra charges. Shri Ravinder Narain also pointed out that the demand for extra charges on account of external electrification and fire fighting measures were squarely covered by clause 2(b) of the agreement. It is the case of the complainants that the respondent has opted for very expensive facilities like 24-hour back up for power. The extra charges on account of these items add up to approximately 45 per cent. One of the grievances of the complaints is that they have invested heavy amount in the hope that they will be able to enjoy the property three years from the date of booking and a delay of more than two years after the promised date has caused them considerable loss. Shri Ravinder Narain argued that the original agreement itself envisage payment of extra charges and what has been demanded is strictly within the scope of the various clauses of agreements and the allottees cannot complain. Since the complainants have not challenged the right of the respondent to levy extra charges and their main grievance is about the exorbitant charges levied by the respondent by indulgence in unfair methods and practices the grievances of the complainants giving rise to the complaint could be described as one relating to the correctness of the charges levied. At this stage we do not have information regarding the break-up of expenditure and the items on which they are based giving rise to the demand for extra charges in order to come to any conclusion about the allegations leveled against the respondent. These are matters to be proved on documents and evidences produced during the enquiry. We find that the complainants agreed for extra charges to be paid later in respect of certain items as per the agreements and such extra charges come to on average around 30 per cent of the amount initially indicated. We are of the view that while essentially the initial price quoted by the respondent was important for taking a decision by the allottees for opting to purchase the property, they have the right to be fully satisfied about the justification for any additional payments demanded later from them. One of the arguments advanced during the hearing was that the complainants did not bargain for the luxury provided by the respondent which they cannot afford. We note that the respondent has already informed the complaints that the extra charges demanded are subject to independent audit and the complainants are entitled for even a refund of amounts later it found due. The enquiry into the main complaints would bring out all facts to reach correct conclusions. Taking all the above factors into consideration we make the following order on the applications of the complainants under Section 12A of the Act:-
1. We do not agree to stay the extra charges demanded by the respondent as prayed by the complainants. However, the demand for extra charges by the respondent as well as the payment towards the same by the complainants will be subject to the outcome of this enquiry.
2. The complainants have referred to their difficulties in making heavy extra payments. On the other hand, the respondent has incurred capital expenditure in the hope of recovering the same from the allottees. Balancing the interests of both, we direct that the respondent shall hand over conditional possession of the apartments/commercial space as soon as they are ready for occupation/carrying out interior decoration without transfer of ownership provided the complainants pay at least 75 per cent of the extra charges demanded without a period of three months.
3. On the conclusion of the enquiry the amount of interest payable on the delayed payment of the extra charges so paid as well as on the balance amount of extra charges which may become payable, if any, as the outcome of the enquiry will be determined by the Commission. As a result of the enquiry if any refund of the amount of extra charges is to be made by the respondent to the complainants such refund will also include interest determined by the Commission.
4. Subject to the above direction the respondent is also restrained from cancelling the apartments/commercial spaces allotted to the complainants till the conclusion of the enquiry.
3. The application filed by the respondent for clarification/ modification of the above reproduced order was disposed of by the Commission vide order dated 24.12.1998, the relevant portions of which are extracted below :- We passed an order on 25-09-1998 while disposing of the application under section 12-a of the mrtp act filed by the complainants. The respondent has filed an application on 9-12-1998 seeking clarification/modification of this order. While this order clarifies the order dated 25-9-1998 to remove doubts, the question of modification of the order on consideration of the application filed by the respondent does not arise. The implications of the directions contained in the order dated 25.9.1998 logically flowing from the points made earlier in that order are as follows:-
1. Since we have stated that the extra charges are subject to the outcome of the enquiry, the extra charges demanded have not been stayed. Thus if any complainant wants complete possession of the flat with transfer of ownership he has to pay the extra charges in full. In other cases, if the complaints are ultimately dismissed or the extra charges are revised by the Commission the interest chargeable on extra charges not paid will be from the dates on which they became originally due as extra charges have not been stayed. However, as per Direction 4 the respondent is restrained from cancelling the flats until the conclusion of the enquiry and therefore if a complainant decides not avail of the dispensation contained in Direction no. 2 and chooses not to pay the extra charges pending this enquiry the flat/commercial space cannot be cancelled. Such a complainant is however subject to Direction no. 3.
2. The purport of the Direction No. 2 is that while he is protected against cancellation of the flat/commercial space, if any complainant pays 75 per cent of the extra charges within a period of three months from the date of the order he should be treated as if he has paid the full extra charges subject to Direction no. 3. In view of this the respondent shall hand over conditional possession of the flat/commercial space as soon as they are ready for occupation or for carrying out interim decoration or depending on whether the flat/commercial space is ready for handing over for interior decoration or for occupation in normal circumstances. Since the quantum of extra payable will be determined at the conclusion of the enquiry for final adjustment, we have already clarified that if the dispensation contained in Direction No.2 is availed of the respondent need not transfer ownership of the flat until the conclusion of the enquiry and any possession given for occupation/interior is thus conditional. Since the three months period referred to in Direction no.2 will be over on 24-12-1998 this period is extended by two weeks ending on 7th January, 1999 as complainants might have waited for this clarification after the application was filed. With this clarification, the application filed by the respondent on 9-12-1998 is disposed
4. In the meanwhile, the Commission framed the following issues:-
1. Whether the respondent has been indulging in unfair trade practices as alleged in the Notice of Enquiry?
2. Whether the alleged unfair trade practices are prejudicial to the interest of the consumer/consumers generally?
5. Next ten years were consumed in recording evidence of the parties.
6. On 01.02.2010, the complaint was dismissed for non-prosecution, but that order was recalled by entertaining RA No.27/20010. After another one year and nine months, the process of recording evidence was again started vide order dated 11.11.2011.
7. By an order dated 09.07.2012, the Tribunal adjourned the complaint sine die on the premise that SLP is pending before the Supreme Court covering similar issues. For next two years, the case was repeatedly adjourned only on the ground that an appeal filed against the order of the erstwhile Commission dismissing the complaint of similarly situated persons was pending before the Supreme Court.
8. On the last date of hearing, i.e, on 21.04.2015, no one had appeared on behalf of the complainant. However, the Tribunal considered it appropriate to adjourn the case with an observation that if no one appears for the complainant on the next date, the complaint may have to be dismissed in default.
9. For the reasons best known to him/her, learned counsel for the complainant has once again thought it proper not to appear to espouse the cause of his/her client. Perhaps the complainant is no longer interested in prosecuting the matter and this appears to be the reason for continued absence of the learned counsel.
10. In view of the above, the complaint is dismissed in default. [G.S.Singhvi] Chairman 20.05.2015