Delaying delivery of flat and non disclosure of stage of completion to buyer was unfair trade practice

By | October 8, 2015

Summary of Facts

Complainant buyer had applied for allotment of a flat with respondent builder .Complainant had paid six instalments but builder did not complete construction of flat within three years as stipulated in brochure and did not inform buyer about progress of construction . Later, builder cancelled allotment on ground of alleged failure of complainant to deposit balance amount . Complainant filed complaint alleging that respondent builder had indulged in unfair trade practice

Case Law on : Section 36A, read with section 36D, of the Monopolies And Restrictive Trade Practices Act, 1969/Section 4 of the Competition Act, 2002

Whether delay in delivery of possession of constructed apartment by respondent builder and non-disclosure of progress of construction to complainant buyer amounted to unfair trade practice under section 36A(1)

Answer Yes

Whether unilateral cancellation of allotted flat for reason that buyer did not pay demanded instalment was illegal and arbitrary becuse buyer had reasonable cause for not to pay

Answer  yes

Whether prayer of complainant for directing respondent to deliver possession of allotted flat was to be rejected as MRTP Commission does not have power of Civil Court to order specific performance of contract

Answer  yes

Whether however, for serving ends of justice, respondent was to be directed to repay amount paid by complainant with compound interest of 15 per cent per annum

Answer  yes

 

COMPETITION APPELLATE TRIBUNAL

Dr. (Mrs.) Manjeet Kaur Monga

v.

K.L. Suneja

JUSTICE G.S. SINGHVI, CHAIRMAN

UNFAIR TRADE PRACTICE ENQUIRY NO. 90 OF 2005
C A NO. 39 OF 2009

AUGUST  3, 2015

Sachin Puri, Dheeraj Gupta and Ms. H. Pandit, Advs. for the Applicant. Aditya Narain, Arnav Narain and Shashank Bhushan, Advs. for the Respondent.

ORDER

1. To own a house is one of the lifetime dreams/wish of millions across the globe. In India, people save money with the hope that someday they will be able to build or buy a house or an apartment for their family. However, many of them become victims of deceit practised by unscrupulous builders/developers, who make false/misleading representations/promises by issuing fascinating advertisements to induce unsuspecting customers to invest their hard-earned money and then delay the projects for years together leaving the customers with no choice but to seek intervention of judicial or quasi – judicial forums. Unfortunately, on account of lack of adequate infrastructure and non-availability of manpower, these forums also take years to decide the cases and at times the third generation of the original applicant is able to reap the fruits. The present one is also a case in which the third generation of Smt. Gursharan Kaur, who had booked the flat in 1989 in the building proposed to be constructed by Respondent No. 2- M/s. Suneja Towers Pvt. Ltd. has been prosecuting the complaint for last more than 8½ years.

2. Respondent No. 2 was allotted free hold plot no. 7 by Ghaziabad Development Authority for developing a group housing scheme. The allotment letter was issued on 15.04.1989 and possession of the plot was given on 02.01.1990.

3. About five months before getting possession of the plot, Respondent No. 2 issued an advertisement in the form of a brochure to induce the public to seek allotment of flats/apartments in the multi-storied buildings proposed to be constructed as part of the group housing scheme. The first and second page of the brochure and some of the stipulations contained in the body thereof are extracted below:

“A NAME SYNONYMOUS WITH QUALITY AND RELIABILITY

SUNEJA’S

Siddharth – Shila Apartments

IN VAISHALI TOWNSHIP

WHERE YOUR DREAM HOME BECOMES YOUR REAL HOME”

 

“This is Our Story

A Bonanza for you from Sunejas one of the most trusted, renowned, fast growing and leading Builders of Northern India with their wings spreading in East and South India.

WE ARE engaged in Civil Engineering Construction and Real Estate Development projects and area professionally managed company manned by highly qualified and experienced technical personnel at all levels to Engineering, high rise structures housing, colonisation, industrial complexes like refineries, fertilizers, cement and other chemical plants, transmission towers, food processing plants, ropeways, institutional buildings, land reclamation, roads, bridges and stadia.

Backed by an excellent track record, Suenja’s Projects be they Commercial or Residential have always received an overwhelming response. Because in keeping with their philosophy of offering great value for your money, you get more than just a decent flat : A Modern Home coupled with rarities like ontime completion, and top quality construction.”

‘Apartments of two and three bedrooms having Super Area of approx. 1000 sft. And 1250 sft. respectively.

Project to be completed in 36 Months.

Payment Terms are Simple and linked with construction schedule. Easy Interest Free Instalments.” (Underlining is Mine)

4. Luredby the prospects of getting a flat near Delhi within three years, Smt. Gursharan Kaur wife of Late Dr. Agya Singh Monga, resident of Dalhousie, Himachal Pradesh madean application dated 14.08.1989 for booking a three-bedroom flat of approximately 1375 sq. ft. super area on the fifth floor of the proposed building. Simultaneously, she tendered Rs. 60,000/- in the form of a demand draft dated 12.08.1989 drawn on Dena Bank, New Delhi. [In compliance of the direction given by the Tribunal on 31.07.2015, Shri Aditya Narain, learned counsel for the respondents produced original application form submitted by Smt. Gursharan Kaur through Sat Pal Pandit and Company, who, according to Shri Aditya Narain, was a property agent].

5. After about two months, Respondents No. 2 issued notice dated 07.10.1989 to Smt. Gursharan Kaur requiring her to pay Rs. 91,250/- representing second instalment of 10% of the total estimated cost in respect of Flat No. 514 in Siddharth-Shila Apartments, Vaishali Township, Ghaziabad. She deposited the amount vide demand draft dated 04.12.1989, which was duly acknowledged by Respondent No. 2 by issuing receipt dated 08.12.1989. The third instalment of Rs. 75,625/- was paid by Smt. Gursharan Kaur vide demand draft dated 10.03.1990 for which receipt dated 14.05.1990 was issued by Respondent No. 2. However, before she could see her dream of owning an apartment near Delhi turn into reality, Smt. Gursharan Kaur left for heavenly abode and on the basis of the Will executed by her, the name of her daughter-in-law, Dr. (Mrs.) Manjeet Kaur Monga (hereinafter referred to as ‘the complainant’), who followed her month-in-law during the pendency of the complaint and is now represented by her legal representatives, was substituted in the records of Respondent No. 2.

6. The complainant deposited two demand drafts dated 27.02.1992 (Rs. 45,625/-) and 27.04.1992 (Rs. 30,000/-) towards the fourth instalment of price. The same were duly acknowledged by Respondent No. 2 vide receipts dated 05.03.1992 and 01.05.1992 mentioning the number of flat as C-403.

7. After almost three years of submission of application by Smt. Gursharan Kaur and deposit of four instalments of price, Respondent No. 2 issued allotment letter dated 21.05.1992 in the name of the complainant in respect of Flat No. B-301 (3rd Floor) having super built-up are of 1375 sq. ft. for a total cost of Rs. 7,56,250/-. The relevant portions of the allotment letter are reproduced below:

‘SUNEJA TOWERS PVT. LTD.

ENGINEERS, BUILDERS, COLONISERS & PROMOTERS

D-345, Defence Colony, New Delhi – 110024

Phone : 698518, 4626898, 4626607

Dated 21-5-1992

To

DR. (MRS.) MANJEET KAUR MONGA

C/O MONGA CLINIC

GHANDHI CHOWK, DALHOUSIE

DISTT. CHAMBA (HIMACHAL PRADESH)

Subject : Allotment of Residential Flat in the Proposed Group HousingScheme Siddharth Shila Apartments at Plot No. 24 in VaishaliScheme, Ghaziabad (U.P.)

Dear Sir(s)/Madam(s)

This has reference to your application dated 14th Aug. 89 for the allotment of residential flat in the proposed multi- storeyed group housing residential building to be known as Siddharth Shila Apartments on Plot No. 24 in Vaishali Scheme of Ghaziabad Development Authority, Ghaziabad (hereinafter referred to as the Plot or the said Plot).

In response to your application, we (hereinafter referred to as the Builder) here, subject to the terms and conditions herewith provisionally allot to you (hereinafter referred to as the Flat Buyer) a residential Flat No. B-301 (hereinafter referred to as the Flat) in the proposed multi-storeyed group housing residential project Siddharth Shila Apartments with an approximate super built up area of 1375 sq. ft. including common areas on THIRD floor for a sum of Rs. 7,56,250/- (Rupees Seven Lacs Fifty Six Thousand Two Handred and Fifty Only) calculated @ Rs. 550/- per sq. ft. of super built area of the flat including common areas. The said rate is exclusive of certain other charges mentioned hereinafter.

The allotment of Flat is made subject to the following terms and conditions :

1. The allotment is ‘Provisional’. The plans are yet to be sanctioned. If for any reason, any further changes are to be made by the sanctioning authorities or by the Architects or the Builder resulting in reduction or increase in the above mentioned area or its location, no claim, monetary or otherwise will be raised or accepted except that the aforementioned rate per sq. ft. will be applicable on the changed area. In case of absolute deletion of Flat, no claim, monetary or otherwise will be raised or entertained except that the amount received will be refunded in full without any interest.

** ** **

4. (a) Instalments due towards payment of the Flat will be at intervals as laid down by the Builder. If payment is not received within stipulated period given in the Instalment Call Notice, or in the event of breach of any of the terms and conditions of this allotment by the Flat Buyer, the allotment is liable to be cancelled and 20% of the price of the Flat will be forfeited and the balance amount will be refunded without any interest.

PLAN “A”

The payment is to be made in the following manner :

– At the time of provisional allotment : 10%
– Within two months of allotment : 10%
– Within six months of allotment or commencement of work whichever is earlier : 10%
– On completion of foundation work : 10%
– On completion of ground floor roof slab : 10%
– On completion of 4th floor roof slab : 10%
– On completion of 8th floor roof slab : 10%
– On completion of super structure : 10%
– On completion of brick work and internal plaster : 5%
– On completion of external plaster/cladding : 5%
– On completion of wood work, flooring except final polishing : 5%
– At the time of possession, after final coat of polishing and painting : 5%’

8. Even though, the respondents did not inform the complainant about the progress of construction, she was served with demand notice dated 29.12.1992 for payment of 5th instalment of Rs. 75,625/-. The complainant did the needful and this was acknowledged by Respondent No. 2 by issuing receipt dated 10.04.1993. Similar demand was raised by Respondent No. 2 vide letter dated 20.04.1993 in which it was indicated that the sixth instalment would become due on completion of 4th floor roof slab. The complainant deposited the instalment of Rs. 75,625/-.Respondent No. 2 acknowledged the payment by issuing receipt dated 10.07.1993. Notwithstanding this, Respondent No. 2 again created demand for the 6th instalment vide letter dated 29.07.1993 which was followed by reminder dated 04.09.1993. Of course, the complainant did not comply with that demand because she had already paid the 6th instalment. For the sake of reference, the duplicate of receiptsdated 10.07.1993 and 10.04.1993 issued by Respondent No. 2 acknowledging the payment of the 5th and 6th instalments of price by the complainant are reproduced below:

‘SUNEJA TOWERS PVT. LTD.

ENGINEERS, BUILDERS,

COLONISERS & PROMOTERS

D-345, Defence Colony, New Delhi – 110024

Phones. : 698518, 4626898, 4626607 TELEFAX :

(011)46321652

Receipt No. 10412

Dated 10.7.93

Received with thanks from Mrs. Manjeet Kaur Monga, Moga Clinic, Gandhi Chowk, Dal house, Distt. Chamba (H.P.) the sum of Rupees Seventy Five Thousand Six Hundred and Twenty Five only in Draft No. 904608 dated 7.7.93 darwwn on SBI, Service Branch, New Delhi on account of Fifth instalment Flat No. C 403 on Fourth floor, Floor Area 1375 sq. ft. approximately in building proposed to be constructed on Plot No. 7 to be known as, “Siddharth-Shila Apartments” at Vaishali Group Housing Scheme, Sahibabad-201010.

For Suneja Towers Pvt. Ltd.

Rs. 75,625/-

Director for Suneja Towers Pvt. Ltd. Director”

Dated : 27.1.94

“SUNEJA TOWERS PVT. LTD.

ENGINEERS, BUILDERS, COLONISERS & PROMOTERS

D-345, Defence Colony, New Delhi – 110024

Phones. : 698518, 4626898, 4626607 TELEFAX : (011)46321652

Receipt No. 10428

Dated 10.4.93

Received with thanks from Mrs. Manjeet Kaur Monga, Moga Clinic, Gandhi Chowk, Dal house, Distt. Chamba (H.P.) the sum of Rupees Seventy Five Thousand Six Hundred and Twenty Five only in Draft No. 904897 dated 25.9.93 darwwn on SBI, Service Branch, New Delhi on account of sixth instalment Flat No. C 403 on Fourth floor, Floor Area 1375 sq. ft. approximately in building proposed to be constructed on Plot No. 7 to be known as, “Siddharth-Shila Apartments” at Vaishali Group Housing Scheme, Sahibabad-201010.

Rs. 75,625/- For Suneja Towers Pvt. Ltd.
Director for Suneja Towers Pvt. Ltd. Director’
Dated : 27.1.94

9. For next about eight years, the complainant did not hear anything from the respondents about the progress of construction and all of a sudden she received letter-cum-demand notice dated 26.12.2001 for payments of 8th and 9th instalments. In that letter it was stated that super structure work and wood work are complete and marble flooring, bathroom tiles etc. are being fixed. For the sake of reference, letter dated 26.12.2001 is reproduced below :

“SUNEJA TOWERS PVT. LTD.

ENGINEERS, BUILDERS,

COLONISERS & PROMOTERS

SUNEJA HOUSE

21, COMMUNITY CENTRE, YUSUF SARAI, NEW DELHI – 110049

TELEPHONE NOS. : 2652119 TELEFAX : 26521192

Regd. A.D.

26th December, 2001

Dr. Mrs. Manjeet Kaur Monga,

C/o Dr. Monga’s Clinic, Gandhi Chowk,

DALHOUSIE,

Distt. Chamba (Himachal Pradesh).

Sub. : RESERVATION OF RESIDENTIAL FLAT NO. B-301, SIDDARTHSHILA APARTMENTS (now changed to GATEWAY TOWERS) AT VAISHALI TOWNSHIP, GHAZIABAD – PAYMENT OF EIGHTH & NINTH INSTALMENTS ON COMPLETION OF SUPER-STRUCTURE, BRICK WORK & INTERNAL PLASTER

Dear Sir/Madam,

We are pleased to inform you that the construction activities in our above said Project are in full swing.

The super structure, brick work and internal plaster has already been completed besides the sanitary piping work, electrical conducting is also complete. We have also completed work of wooden door frames, windows and the wooden glazing frames. We have commenced work of laying marble flooring, bathroom tiles and internal electrical wiring and many other allied activities are in progress.

Yours as well as ours endeavour and objective is to complete the Project the soonest possible. To help us achieving this, you are requested to extend your active and crucial participation and involvement by way of making the payments of the prescribed instalments as laid down in the Agreement on receipt of our Instalment Call Notices within the stipulated period given therein and thereby augmenting the depleted resources at our disposal to avoid any further, both, time and cost overrun.

You were allotted flat with a provisional super area of 1375 sft., which now according to plans works out to 1586 sft.

In accordance with the agreed Payment Plan, you are therefore requested kindly to remit the Eighth & Ninth instalment of payment which has become due on completion of super structure, brick work and internal plaster.

Therefore the present position of your accounts with us is as under :

(1) Amount Due
1586 sft. @ Rs. 550.00 per sft.
(Equivalent to 85% of the basic estimated cost of the flat including the Eighth & Ninth instalments) = Rs. 7,41,455.00
(2) Total amount received = Rs. 4,53,750.00
(3) Balance amount due = Rs. 2,87,705.00

The payment of balance amount of Rs. 2,87,705.00 may kindly be arranged so as to reach us within 15 days from the date of issue of this Notice so that the existing steady progress of the construction of the project which is in full swing is not hampered.

Please be free to contact the undersigned if you require any further information.

Your co-operation is solicited.

Thanking You,

Yours sincerely,

For SUNEJA TOWERS PVT. LTD.

(K.L. Suneja)

Director”

10. The aforesaid letter was followed by three reminders dated 25.01.2002, 06.03.2002 and 08.04.2002. However, the complainant did not deposit Rs. 2,87,705/-. The reason for this is evident from letter dated 22.05.2002 sent by her, which is self-explanatory and is reproduced below:

“Dated 22.05.2002

Director,

Suneja Towers Pvt. Ltd.,

Suneja House,

21, Community Centre, Yusuf Sarai,

New Delhi – 49.

Sub.:- Payment for Instalment for flat No. B-301 in Gateway Towers, Vaishali Township, Ghaziabad.

Sir,

It is in reference to your Installment-call-Notice for the payment of 8th& 9th Instalment.

As you are very well aware that the above said project has been delayed owing to reasons on your part. The payment of Rs. 4,53,750.00 has already been paid. It is still nor clear as to when the project shall be completed. There has been a breach of confidence due to the unwarranted delays in the completion of the project. The restoration of the same confidence is very necessary for a cordial execution of the agreement.

You are therefore requested to intimate the expected date of completion of work and when would you be handing over the possession of the flat to us.

Thanking you,

Best Regards,

Dr. (Mrs.) Manjit Monga,

C/o Dr. Monga’s Clinic,

Gandhi Chowk,

DALHOUSIE,

Distt. – Chamba (H.P.)”

11. The respondents neither gave any reply to the aforesaid letter of the complainant nor informed her about the progress of construction but after a gap of almost three years, they cancelled the allotment vide letter dated 30.04.2005 on the ground of alleged failure of the complainant to pay the instalments of balance price. The cancellation letter was accompanied by a pay order of Rs. 4,53,750/-. For the sake of reference, that letter is reproduced below:

“SUNEJA TOWERS PVT. LTD.

ENGINEERS, BUILDERS,

COLONISERS & PROMOTERS

SUNEJA HOUSE

21, COMMUNITY CENTRE, YUSUF SARAI, NEW DELHI – 110 049

TELEPHONE NOS. : 2652119 TELEFAX : 26521192

30th April, 2005

Regd. A.D.

Dr. Mrs. Manjeet Kaur Monga

C/o Dr. Monga’s Clinic Gandhi Chowk

Dalhousie, Distt. Chamba (H.P.).

Sub. :Cancellation of allotment of Flat No. B-301 Sidhartha Shila Apptts. (now changed to Gateway Towers) at Plot No. 24, Sector 4, Vaishali, Ghaziabad

Dear Madam,

We would like to draw your kind attention to the allotment letter dated 21st May, 1992 containing the terms & conditions of allotment of subject Flat, duly agreed by you.

In terms of clause 4(a) of the Letter of Allotment you opted for plan ‘A’ to make payment for purchase of the said Flat No. B-301 in instalments on the basis of call notices to be issued from time to time depending upon progress of construction.

It has been emphasized time and again that timely payment of the instalments by the flat buyers is the essence of our agreed terms but you have not paid installments on the due dates. We had issued our call notice towards 85% of the estimated basic cost of Flat including 8th and 9th instalments for Rs. 2,87,705.00 (Rupees Two Lakh Eighty Seven Thousand Seven Hundred Five only) vide our Regd. A.D. letter dt. 26.12.2001. We sent reminders dt. 25.01.2002 and 06.03.2002 through Regd. A.D. Post but you failed to respond and did not make any payment. We again reminded you vide our Regd. AD letter dt. 08.04.2002 to make payment of Rs. 2,87,705/- within seven days, failing which it shall be considered as default on your side. But you did not make the payment.

You have failed to make the above payment and wilfully defaulted. Under the circumstances we have no option but to cancel your allotment. Kindly find enclosed herewith our Pay Order No. 885894 dt. 30.04.2005 for Rs. 4,53,750.00 (Rupees Four Lacs Fifty Three thousand Seven Hundred Fifty only) drawn on Citi Bank towards full refund of payments made by you against the allotment of the above said flat.

Kindly note that you do not hold any lien, title or right, whatsoever, in the above said flat.

Kindly acknowledge receipt and return to us the Allotment Letter and payment receipts issued from time to time.

Thanking you,

Yours truly,

for SUNEJA TOWERS PVT. LTD.

(K.L. SUNEJA)

Director”

12. On receipt of the letter of cancellation, the complainant sent notice dated 07.09.2005 to the respondents through her advocate. In the notice, it was specifically mentioned that the complainant was always ready and willing to pay the instalments of price in accordance with Plan-A contained in the allotment letter but the respondents did not keep their promise with regard to pace and quality of construction. It was pointed out that even 30-40% construction had not been completed till the seventh instalment and this was the position despite the fact that the complainant had paid Rs. 4,53,850/-. The complainant demanded that possession of the apartment booked in 1989 may be given to her and compensation of Rs. 25 Lacs be paid in lieu of harassment inflicted by Respondent No. 2. Along with the notice, the complainant returned the pay order of Rs. 4,53,750/-. She also sent a cheque of Rs. 1,00,000/- to signify her readiness and willingness to pay the price of the flat.

13. The respondents promptly sent reply dated 26.09.2005 through their advocate. They denied the allegation of delay in construction. At the same time they accused the complainant of delay in payment of instalments. It was also claimed that some delay had occurred in completion of projects due to litigation involving the Ghaziabad Development Authority.

14. Having failed to evoke positive response from the respondents, the complainant filed a complainant under Section 36 of the Monopolies and Restrictive Trade Practices Act, 1969 (in short ‘the Act’) and prayed that an enquiry may be ordered into the restrictive and/or unfair trade practice indulged by the respondents. She further prayed that the respondents be directed to continue to treat her as lawful allottee of Flat No. B-301 and hand over peaceful physical possession thereof or of an alternative flat of the same size and dimension. These prayers are founded on the following assertions:

“(b) That the complainant/petitioner fulfilled all the requirements desired by the complainant/petitioner in respect of the allotment of the flat. The complainant/petitioner accordingly issued an allotment letter allotting Flat No. B-301 in multi-storeyed group housing residential project, Sidharth Shila Apartments with approximately super built up area of 1375 sq. ft. including common areas on third floor for a sum of Rs. 7,56,250/- calculated @ 550/- per sq. ft. of super built up area of the flat including common areas vide letter dated 21st May, 1992; containing certain terms and conditions. The complainant/petitioner has broadly accepted some of them while a few were highly unreasonable and objectionable. The mode of payments, as indicated in the allotment letter, has been as under:

PLAN ‘A’

The payment is to be made in the following manner :

At the time of provisional allotment : 10%
Within two months of allotment : 10%
Within six months of allotment or commencement of work whichever is earlier : 10%
On completion of foundation work : 10%
On completion of ground floor roof slab : 10%
On completion of 4th floor roof slab : 10%
On completion of 8th floor roof slab : 10%
On completion of super structure : 10%
On completion of brick work and internal plaster : 5%
On completion of external plaster/cladding : 5%
On completion of wood work, flooring except final polishing : 5%
At the time of possession, after final coat of polishing and painting : 5%

(c) That the complainant/petitioner accordingly, started making payments as demanded by the respondents even before 1992. The respondents promised to hand over possession of completely constructed furnished flat within a period of three years thereafter. The complainant/petitioner has been continuing paying the instalments as and when demanded, though, some of the instalments were paid by the complainant/petitioner which were not falling due. The Xerox copies of the payment receipts are annexed hereto as Annexure P-3 (Colly.).

(d) That unfortunately, the respondents did not keep their promises and assurances particularly with regard to pace of construction, quality of construction and continuity thereof. Without completing the required construction at a particular point of time the respondents kept on demanding instalments. Despite that, the complainant/petitioner complied with call of the demand letters and always paid even undue instalments. The complainant/petitioner paid seven instalments upto 4th October, 1993, amounting to Rs. 4,53,850/- i.e. equivalent to 60% of the total cost of the flat. Xerox copies of four further receipts are annexed hereto as Annexure P-4 (Colly.).

** ** **

(g) The amount claimed plus already paid amount of Rs. 4,53,850/- virtually comes equivalent to the entire cost of the flat which not even ready for possession at the time of dispatch of three letters by the respondents. Be that as it may, the complainant/petitioner was not even well during those days and happened to be in Chandigarh for her treatment. Notwithstanding the same, the complainant/petitioner has always been willing and inclined to pay entire dues subject to the genuinely falling instalments and not before that as the respondents have been intentionally failing to complete construction with definite mala-fide so as to let the price of construction material and land hike and charge from the allottees most unreasonably.

(h) That ultimately the complainant/petitioner received a letter dated 30th April, 2005, speaking something highly objectionable and unacceptable whereby the respondents have allegedly cancelled allotment of the complainant/petitioner. The respondents have also enclosed with that letter a pay order dated 30th April, 2005 for Rs. 4,53,750/- drawn on Citibank N.A. towards full refund of payments made by the complainant/petitioner against allotment of the flat. These activities of the respondents are absolutely restrictive and unfair besides attracting numerous provisions contained in the Indian Penal Code particularly breach of faith, trust, cheating and fraud. The respondents’ unfair trade practices which have also caused tremendous mental shock and agony to the complainant/petitioner as due to respondents such unreasonable delay in completing the project the complainant/petitioner has suffered a lot as she always remained inclined to shift to Delhi or its nearby place so as to start her medical practice here, thereby the complainant/petitioner has already suffered unremitting hardships and financial loss calculating to the tune of Rs. 25 lakhs.”

15. The complainant also filed an application under Section 12-A of the Act with the prayer that the respondents be restrained from alienating Flat B-301 in Siddharth Shila Apartments. She filed another application under Section 12-B which came to be registered as C.A. No. 39/2009 for award of compensation of Rs. 25 Lacs by asserting that she has become victim of unfair trade practice indulged by the respondents.

16. By order dated 05.06.2006, the Commission disposed of the application filed by the complainant under Section 12-A of the Act and restrained the respondents from creating third party interest in Flat No. B-301 in the disputed complex.

17. In response to the notice issued by the Commission, the respondents filed reply dated 07.02.2006. They denied the allegation of restrictive and/or unfair trade practice and pleaded that the complainant cannot seek any relief under the Act because it was merely a case of the so- called breach of contract. The respondents pleaded that the complainant had failed to make payment in accordance with Plan-A specified in Para 4 of the allotment letter and, as such, she is not entitled to any relief. It is also averred that vide letter dated 22.05.2002, the complainant had shown her disinclination to take the flat by alleging breach of confidence on the part of Respondent No. 2 and she cannot now turn around and level allegation of restrictive and/or unfair trade practice. The respondents also denied that brochure was issued for advertising Siddharth Shila Apartments by stating that the averments contained in the complaint are vague and incomplete. Similar reply was filed in response to the Notice of Enquiry issued by the Commission.

18. By an order dated 20.11.2007, the Commission framed the following issues :

(a) Whether the respondent has been indulging in unfair trade practices in terms of the Notice of Enquiry ?
(b) Whether the alleged unfair trade practices are prejudicial to the interest of the complainant and/or public in general ?

19. The 1969 Act was repealed by Section 66 of the Competition Act, 2002 which was brought into force with effect from 01.09.2009. In the meanwhile, Chapter VIII-A was inserted in the 2002 Act for establishment of the Appellate Tribunal, its composition and jurisdiction to hear appeals against the orders passed by the Competition Commission of India. The cases pending before the erstwhile Commission were transferred to the Tribunal.

20. Since the Commission had not framed issues in the application filed under Section 12-B of the Act, the Tribunal passed order dated 29.07.2011 and framed the following issues :

(i) Whether the petition filed are maintainable ?
(ii) Whether the allegation of unfair trade practices as alleged has been established ?
(iii) If the answer to the second question is in the affirmative, whether it is prejudicial to the public interest ?
(iv) Whether the applicant is entitled to any compensation ?

21. In support of the complaint, Shri Karan Veer Singh Monga, one of the legal representatives of the complainant filed affidavit dated 31.01.2008. He, by and large, reiterated averments contained in the complaint and averred that Respondent No. 2 did not complete construction as per the promise held out in the brochure and the stipulations contained in the allotment letter and arbitrarily cancelled the allotment ignoring the fact that the complainant had already deposited Rs. 4,53,856/-. He also filed the following documents:

1. Original copy of site plan/building plan
2. Original copy of mode of payment in allotment letter dated 21.05.1992.
3. Original copies of the payment receipts dated 14.08.89, 14.08.89, 07.10.89, 08.12.89, 09.12.89, 08.12.89, 14.05.90 & 05.03.92
4. Original payment receipts dated 01.05.92, 29.12.92, 03.12.93, 20.04.93, 18.05.93, 30.08.93, 12.06.93, 10.07.93, 10.07.93, 29.07.93, 04.09.93, 10.04.93, 10.04.93, 27.10.94.
5. Original letters dated 26.12.2001, 25.01.2002 and 06.03.2002.
6. Original letter by Petitioner to Respondents indicating its responsibilities for delay in construction dt. 27.05.2002 with AD card and Postal Receipt dt. 22.05.2002
7. Original cancellation letter dated 30.04.2005 & original Manager’s cheque for a sum of Rs. 453750/- dated 30.04.2005.
8. Original copy of the legal notice dated 07.09.2005 along with original banker’s account cheque for Rs. 1,00,000/- dt. 07.09.2005.
9. Original reply of notice dated 26.09.2005.

22. Shri Karan Veer Singh was cross-examined on 03.09.2008 and again on 10.09.2012. In the first cross-examination, he denied the suggestion that the complainant had defaulted in making payment but admitted that she did not pay any instalment after October 1993 till the cancellation of allotment. In reply to the query made by the Commission, Shri Karan Veer Singh stated that the complainant had opted to make payment as per Plan – A and the reason why she did not pay instalments after 1993 was that the construction had not come up as per Plan – A. He also stated that the possession of the flat was not handed over by the respondents within the stipulated period. In the second cross-examination, the deponent admitted that no specific time was indicated in the allotment letter. The relevant portions of the two cross-examination are extracted below :

‘Cross-examination dated 03.09.2008 :

“I do not agree with the suggestion that my mother defaulted in making payments due from her after 1993. I agree with the suggestion that my mother did not pay any instalment to the respondent after October 1993. She did not make any further instalment after October 1882 till the cancellation of the allotment. I can’t state with certainty if the allotment letter authorizes the allottee to stop making payments under certain exigencies. To a specific query from the Commission, I would state that complainant had opted to make payments as per Plan-A. The reason at our end for not making payment after 1993 was that the construction had not come up according to the Plan-A. I confirm having received a letter dated 26th December 2001 from the respondent calling upon the complainant to make payment of 8th & 9th instalments. We received subsequence reminders but we perhaps did not receive letter dated 8th April 2002 being referred to by the respondent in its reply. By the connotation of RTP, as a layman, I mean a practice which is not just & fair. I have made a statement at para – 4 of my affidavit that the respondent had promised to hand over possession of completely constructed furnished flat within a period of three years thereafter. By the connotation thereafter, I would mean from 1989 onwards. This fact is not borne out by the allotment letter.”

Cross-examination dated 10.09.2012 :

“Q. I put it to you that there is no reference in the agreement to a specific time within which possession was to be given by the respondent to the complainant ?

A. I am not very sure about the clause in the agreement. It is all in the record. I have ready the agreement.

Q. Can you point out any specific clause in the agreement which provides for a specific time frame within which possession was given to the complainant by the respondent ?

A. There is no specific time but it says that the delivery has to be made as soon as possible in clause 9.’

23. Shri Karan Veer Singh Monga filed another affidavit dated 14.03.2012 in support of the application under Section 12-B. He repeated the statements made in affidavit dated 31.10.2008 and also averred that the complainant had sent a cheque bearing No. 879293 dated 07.09.2005 for Rs. 1,00,000/- drawn on HDFC Bank in favour of the respondents to signify her willingness to accept the flat. He further stated that although the complainant was desirous of shifting to Delhi to start her medical practice either by running a clinic or some Nursing Home, she could not do that because of non-delivery of possession of the apartment and died on 31.12.2006.

24. Shri K.L. Suneja, Director of Respondent No. 2 filed affidavit dated 11.02.2013. He denied that any promise was made to the complainant to complete the construction within three years. He relied upon clauses 4(a) and 9 of the allotment letter and claimed that even though no promise was made for completion of construction, the allottee was bound to pay the instalments on scheduled dates. He has also averred that the allottee had consistently failed to pay the instalments on time. On the question of delay in construction, Shri K.L. Suneja relied upon the orders passed by the Allahabad High Court and the Supreme Court in the writ petition and the special leave petition filed by Respondent No. 2 against the Ghaziabad Development Authority. He also claimed that there was a total collapse of real-estate market particularly in Ghaziabad (U.P.) resulting in buyers stopping instalment payments and demanding refund. According to him, the allotment made in favour of the complainant was cancelled because she delayed the payment of instalments and refused to pay the seventh, eighthand ninth instalments. In his cross-examination held on 08.01.2014, Shri Suneja denied that any brochure was issued by the respondents about the group housing scheme, Siddharth Shila Apartments. He, however, admitted that the complaint filed by one Smt. Krishna Tomar was allowed by the District Consumer Disputes Redressal Forum. He also admitted that the agreement entered with Smt. Krishna Tomar is similar to the one entered with the complainant. The relevant portions of the cross-examination of Shri K.L. Suneja are extracted below :

“The document at page 310 shown to the witness.

It is incorrect to state that the aforesaid document is the brochure the respondent had published while launching the group housing scheme, Siddharth Shila Apartment, Plot No. 24, Vaishali, Ghaziabad. It may be correct to say that one Smt. Krishna Tomar had filed a complaint against the second Respondent before District Consumer Forum. It is incorrect that the dispute was similar to the dispute herein. I cannot say what was the dispute before the District Consumer Forum.

Q. I put it to you that the Consumer District Redressal Forum in the case of Smt. Krishna Tomar has held that the document at page 310 is the brochure the Respondent had published while launching the group housing scheme, Siddharth Shila Apartment, Plot No. 24, Vaishali, Ghaziabad and as such what you have stated above is false ?

Ans. The Forum may have held so but I do not agree to it.

I had filed an appeal against the order of the Consumer District Forum.

Q. Is it correct that the appeal was disposed of by the order dated 2.6.06 (at page – 324) ?

Ans. Yes.

I do not recollect whether I had filed any appeal or revision against the aforesaid order.

Q. I put it to you that you have not filed any appeal or revision against order dated 2.06.06 ?

Ans. I do not recollect as the matter was settled with the Complainant in that case long time ago. I did not file the appeal as the matter was settled with the complainant in that case.

** ** **

Q. Is it correct that the agreement between Smt. Krishna Tomar and the Respondent is the same as one between Dr. Monga and the Respondent ?

Ans. Yes.”

25. At this stage, it will be apposite to mention that the legal representative of the complainant filed an application dated 30.04.2013 along with certified copies of order dated 19.07.2005 passed by the Consumer Disputes Redressal Forum II, New Delhi in Case No. 1358/2000 – Krishna Tomar v. Suneja Towers (P.) Ltd., and order dated 02.05.2006 passed by the State Commission, Delhi in Appeal No. FA-790/2005- M/s. Suneja Towers Pvt. Ltd. v. Mrs. K. Krishna Tomar. They also placed on record certified copies of the complaints filed by Smt. Krishna Tomar under the Consumer Protection Act, 1986 and three complaints filed by Emerging Financial Services Ltd. under Section 12-B of the Act; Smt. Sangeeta Arora and Shri Rajiv Bakshi under Section 12 of the Act to show that each of the complainants had relied upon the brochure issued by Respondent No. 2 and copies thereof were enclosed with the complaints.

26. Arguments in this case were heard on 13.10.2014 and again on 24.11.2014, on which date, the respondents were directed to file an affidavit clearly stating whether the advertisement/brochure, which is available at Pages 310-319 of the complaint file was issued by them and whether Smt. Gursharan Kaur (wrongly typed as Smt. Gurucharan Kaur) had booked the flat in the towers proposed to be constructed by them.

27. In compliance of that order, Shri K.L. Suneja filed affidavit dated 09.01.2015 and denied that xerox copy of the document at Pages 310-319 was issued by the respondents. The Tribunal did not feel satisfied with the bald and vague affidavit of Shri K.L. Suneja and directed him to file an appropriate affidavit in compliance of the direction contained in order dated 24.11.2014. Thereafter Shri K.L. Suneja filed affidavit dated 03.02.2015, paragraphs 2 to 7 of which are reproduced below :

“2. I say that the advertisement at Pages 310-319 was neither referred to in the Complaint dated 07.10.2005 nor in the Compensation Application dated 07.10.2005 nor in the Affidavits of Evidence dated 04.02.2008 and 02.03.2012 filed on behalf of the Complainant.

3. I say that after conclusion of cross-examination of the witness for the Complainant on 10.09.2012 and after I had filed Affidavit of evidence on 12.02.2013, the Complainant filed an application for additional documents dated 30.04.2013, which included the advertisement at Pages 310-319.

4. I say that the Hon’ble Tribunal by Order dated 06.05.2013 rejected the Application for additional documents though liberty was granted to the Complainant to confront the Respondent’s witness with the said documents.

5. I say that I was shown the document at Page 310 and had stated that it was incorrect to state that the aforesaid document is the Brochure the Respondent had published while launching the Group Housing Scheme.

6. I say that by Orders dated 24.11.2014 and 16.01.2015 passed by the Hon’ble Tribunal, the Respondents were directed to state on Affidavit as to whether the advertisement (Pages 310- 319) had been issued by Respondents and whether Smt. Gursharan Kaur had booked the flat in the towers proposed to be constructed by Respondents.

7. I say that the advertisement at Pages 310-319 of the case file, was not issued by the Respondents.”

28. Shri Sachin Puri, learned counsel for the complainant who is represented by her legal representatives, extensively referred to the pleadings and evidence of the parties and argued that the action of the respondents to cancel the allotment on the ground of the complainant’s failure to pay 8th and 9th instalments is liable to be declared as unfair trade practice within the meaning of Section 36-A of the Act because they had made false promise to complete the construction within 36 months. Learned counsel laid considerable emphasis on the fact that even though the brochure issued by the respondents contained an unequivocal stipulation about completion of the project within three years and the payment plan embodied in clause 4 of the allotment letter was intrinsically connected with the progress of construction, the respondents neither adhered to the time schedule nor apprised the complainant about the status of construction and continued to demand of instalments of price, which were regularly paid by the complainant till October, 1993. Shri Puri pointed out that in response to demand notice dated 26.11.2001 and three reminders issued on 25.01.2002, 06.03.2002 and 08.04.2002, the complainant had sent letter dated 22.05.2002 to protest against delay in the completion of project but the respondents did not even acknowledge the same and arbitrarily cancelled the allotment on the pretext of non-payment of eighth and ninth instalments. Learned counsel submitted that if the respondents had not promised completion of project within three years, the predecessor of the complainant may not have booked the flat in the project and paid Rs. 4,53,850/-. He finally submitted that if a direction for delivery of possession cannot be given in view of the law laid down by the Supreme Court in Ghaziabad Development Authority v. Ved Prakash Aggarwal [2009] 91 SCL 281, the Tribunal should compensate the complainant by awarding interest on the instalments deposited between 14.08.1989 and October, 1993.

29. Shri Aditya Narain, learned counsel for the respondents argued that the brochure on which reliance has been placed by the complainant was not issued by the respondents and, therefore, the same cannot be relied upon for recording a finding that they had promised completion of project within three years. Learned counsel invited the Tribunal’s attention to the averments contained in the reply filed on behalf of the respondents and affidavits of Shri K.L. Suneja to show that the respondents had not made any promise to complete the project within 36 months and argued that they cannot be held guilty of unfair trade practice merely because the project was delayed. Learned counsel emphasised that much of the delay was caused due to the pendency of litigation before the High Court and the Supreme Court and failure of the customers to pay the instalments on due dates. Shri Aditya Narain relied upon the judgement of the Supreme Court in Ghaziabad Development Authority (supra) and argued that in exercise of power vested in it under Section 36-D of the Act, the Tribunal cannot order specific performance of the contract.

30. I have considered the respective arguments and carefully perused the records. The following questions need consideration in this case :

(i) Whether the respondents have indulged in unfair trade practice as defined under Section 36-A of the Act ?
(ii) Whether the cancellation of allotment of Flat No. B-301 in Siddharth Shila Apartments is legal and justified ?
(iii) Whether a direction can be issued to the respondents to deliver possession of Flat No. B-301 in Siddharth Shila Apartments, Vaishali Township, Ghaziabad ?
(iv) Whether the legal representatives of the complainant are entitled to compensation ?

Re : 1

31. A recapitulation of the facts emerging from the pleadings and evidence of the parties shows that Ghaziabad Development Authority had allotted plot to Respondent no. 2 on 15.04.1989 and possession thereof was given on 02.01.1990; that even before getting possession, the respondents advertised the same in the form of a brochure to attract the buyers to book the flats in the buildings proposed to be constructed on the plot. No doubt the respondents have disputed the complainant’s assertion that they had issued brochure with a promise to complete the project within three years, the falsity of their stand is established from the documents filed by the complainants which include the complaint filed by Smt. Krishna Tomar under the Consumer Protection Act, 1986 and the orders passed by the District Consumer Forum and the Delhi State Commission respectively, the relevant portions of which are extracted below :

Order dated 19.02.2005 passed by Consumer Disputes Redressal Forum-II, New Delhi in Smt. Krishna Tomar (supra)

“There can be no dispute regarding the proposition that contract act applies to the proceedings before this forum. However, it is to be seen as to in what circumstances the contract relied upon was executed. The copies of the brochure filed by the complainant regarding the scheme in question floating by the OP it is clearly mentioned that the project was to be completed in 36 months and there was not be any escalation charges. The OP has disowned these brochures. However, after going through the contents of these brochures and the buyers agreement we are inclined to hold that these brochures were issued by the OP. At the time of the execution of the application for allotment of a flat in the scheme (Annexure R-1) the format of the Flat Buyers Agreement was not shown to the complainant and nor the complainant was told specifically that there was no time limit for the completion of the project or that the agreement also contained an escalation clause. Had she been made aware of these facts, she would have thought twice to book a flat in such a scheme which did not have any time period for the completion of flats. In view of the declaration made by the OP in its brochures on these subjects the complainant could not have imagined that the Flat Buyers Agreement would be contrary to the specific declaration made by the OP in its brochures relating to the scheme and provided to her. Hence the agreement on the part of the complainant to execute the Flat Buyers Agreement on the standard format of the OP company and to abide by the terms and conditions of the Sale laid down therein has no meaning. There could not be a blanket agreement to execute an agreement the terms and conditions of which were not known to the complainant. In these facts and circumstances of the case the version of the complainant that she had already paid a sum of Rs. 2,58,500/- and the OP threatened her to sign the agreement in the year 1992 or to forego the money paid by her seems to be probable and we are inclined to accept the same. The OP has committed unfair trade practice by incorporating in the Flat Buyers Agreement the terms and conditions contrary to those declared in the brochures of the scheme as a result of which the complainant was misled. The belated construction also constitutes deficiency in service.”

Order dated 02.05.2006 passed by the State Commission: Delhi in Suneja Towers (P.) Ltd. (supra):

“Admittedly the appellant promised to complete construction of the flat booked by the respondent on 25-07-89 for a total cost of Rs. 6,46,000/- payable in 36 months time and the possession was to be given by October, 1992 and latest by January, 1993.’

32. Paragraphs 3, 4 and 5 of C.A. 76/2008 in UTPE 76/2006 – Emerging Financial Services Ltd. v. Suneja Towers (P.) Ltd.; Paragraphs 2 to 9 of Complaint Case No. 456/2009 – Smt. Sangeeta Arora v. Suneja Towers (P.) Ltd. and Paragraphs 2 to 6 of Complaint Case No. 283- 284/2007 – Rajiv Bakshi v. Suneja Tower (P.) Ltd., which show that all the complainants had relied upon the brochure issued by Respondent No. 2 read as under :

Emerging Financial Services Ltd. (supra):

‘”3. The Respondent had issued newspaper advertisements in 1989 representing that they are developing a multi storied residential complex in the name of Siddharth Shila Apartments (now known as Gateway Towers), Vaishali Township, Ghaziabad having 2/3 bedroom residential apartment with all modern amenities. Further, the Respondent in their Brochure have represented that the residential complex will be ready for occupation, within a period 3 years.

4. Based on the representations made by the Respondent in the said advertisement and further representations made during the personal discussion held between the parties, the applicant booked for a three bedroom flat on July 26, 1989. At the time of booking the flat, the Applicant was informed that the cost of the flat would be Rs. 6,46,250/- and the same is to be paid in construction-linked instalments. Further, the Applicant was informed that the cost of the flat is fixed and there would be no escalation of costs, other than for force majeure conditions.

5. Thereafter the Respondent issued an Allotment Letter allotting Flat No. D-202, Siddharth Shila Apartments, with an approximate super built up area of 1175 sq. ft. including common areas on the Second Floor for a sum of Rs. 6,63,875/. Along with the Allotment Letter, a Flat Buyers’ Agreement containing the terms and conditions in standardised format Agreement. The Applicant executed the Agreement attached to the Allotment Letter on June 29, 1993, a true copy whereof is annexed for occupation within a period of 3 years (as represented in 1989 at the time of booking and filling in the application form), even at the time of executing the Allotment Letter, the complex including the individual flats were largely incomplete. On enquiry, the Applicant was informed that initially there were a few snags, which have been attended to, and the possession of the flat would be handed over within 18 months.”

Complaint Case No. 456/2009 – Smt. Sangeeta Arora

“2. That initially M/s. Bhola Investments Pvt. Ltd., 21/51 Punjabi Bagh, New Delhi, have booked one residential flat bearing Flat No. D-601, Siddharth Shila Apartments, Plot No. 24, Vaishali Township, Ghaziabad, with the Opposite Parties in their own name on 1st August, 1989 and agreed to pay instalments at the various developing stages of the construction done by the Opposite Parties.

3. That on the request of M/s. Bhola Investments Pvt. Ltd. those who had originally booked a flat with the Opposite Parties passed a Resolution thereby transferring the booking of Flat No. D-601, Siddharth Shila Apartments, Plot No. 24, Vaishali Township, Ghaziabad, in the name of the present Complainant and on the request of the said company, the Opposite Parties transferred the booking and allotment in the name of the present Complainant.

4. That the Opposite parties initially had promised that they will complete the construction work and complete the project within a period of three years (36 months).

5. That the Complainant paid the following instalments to the Opposite Parties :—

(i) 29.07.1989 – Rs. 55,000/-
(ii) 19.10.1989 – Rs. 70,725/-
(iii) 02.02.1990 – Rs. 62,863/-
(iv) 26.03.1992 – Rs. 62,863/-
(v) 07.01.1993 – Rs. 62,863/-
(vi) 27.07.1993 – Rs. 62,863/-
(vii) 14.04.1994 – Rs. 62,863/-

Thereby, the complainant paid a total sum of Rs. 4,40,039/- as per the agreement and as per the terms of the booking of the flat with the Opposite Parties.

6. That as per the terms of the agreement, the Complainant had to pay for the flat a total value which was fixed to be Rs. 6,28,625/-.

7. That after making the aforesaid payments, particularly the last payment which was made on 14.04.1994, the construction activities of the Opposite Parties almost came to an end. The Complainant herself and through her family members kept on inquiring as to when the entire construction activities would be completed and as to when the Opposite Parties are going to hand over the possession of the flat. It is worth mentioning that at the time of booking of the flat in the Year 1989, it was apprised that the Opposite Parties will be completing the project within a period of three year (36 months) and will hand over the possession immediately thereafter but the Opposite Parties stopped the construction activities due to their internal problems and made the Complainant to wait since year 1989. The Complainant and her family kept on calling the Opposite Parties to know the status of the flat as the construction amount was already paid by the complainant. However, the Opposite parties failed to give any satisfactory reply of the demands and queries raised by the complainant and by her family members from time to time. The Complainant thus, waited for more than 13 years to know the fate of the case.

8. That it was only on 26.12.2001, the Opposite Parties informed the Complainant thereby calling upon the Complainant to make balance payment of 8th and 9th instalments. The Complainant then got inquired herself and from her family persons and requested the Opposite parties as to why a period of more than 13 years have been taken and why the Complainant should be compelled to make the balance payment till the entire construction activities were not complete. However, no satisfactory reply was given by the Opposite Parties, though the Opposite Parties have taken more than 13 years to complete the construction work.

9. That the Complainant number of times called the Opposite Parties to know the status of the construction work to which the Opposite parties kept on informing the Complainant that very soon the construction work will get over and they will allot the flat by handing over the possession against the balance payment and at the same time the Opposite Parties also alleged that they will be charging interest with effect from the last payment made by the Complainant. The Complainant reminded the Opposite Parties and their officials that the delay in construction was only because of the faults of the Opposite Parties and the Complainant should not be harassed for their acts but it is the Opposite Parties who should be blamed for any of the delay caused during the period the Opposite Parties made construction of the super structure.”

Complaint Case No. 283-284/2007 – Rajiv Bakshi :

“2. That the complainant booked a flat in the Group Hosing Residential Project Siddarthshila Apartments now known as “Gateway Towers”, Vaishali Township, Ghaziabad (U.P.) on 12.8.1989 by paying an amount of Rs. 60,000/- to the respondent company. At the time of booking of flat by the complainant, it was assured to the complainant that the Housing Scheme floated by the respondent company would be completed with a span of 3 years and possession would also be delivered in the time period of 3 years so mentioned. Further, it was also made clear by the OP that there would be no escalation in the prices. The photocopy of receipt of booking amount dated 12.8.1989 is appended herewith as Annexure C-1 with this complaint.

3. That consequent to this booking the complainant paid timely instalments thereby performing his part of agreement very promptly. When 3 years passed and the possession of flat was not delivered, the complainant approached the OP and asked about the delivery of the possession of the flat and then it was told to the complainant that it will take some more time for the construction to complete. To satisfy the complainant, the OP issued allotment letter dated 2.7.1992 in the name of the complainant in which it was shown that the complainant has been allotted residential flat No. B-701 in the proposed multi-storeyed Group Housing Residential project namely Siddharthshila Apartments with an approximately super-built area of 1375 sq. ft. including common area on 7th floor for a sumo f Rs. 7,49,375/- calculated at Rs. 545/- per sq. ft. of super built area of the flat including common areas. A photocopy of the allotment letter dated 2.7.1992 is annexed herewith as Annexure C-2 with this complaint. A perusal of this allotment letter would clearly show the one sidedness and the complainant accepted this allotment letter only under duress as a lot of money was involved.

4. That after this the complainant again started paying the instalments of the price of the flat. Again when by the end of year 1994, there were no signs of delivery of possession of flat as the construction was not complete, the complainant again approached the OP and asked about the delivery of possession of his flat and again no satisfactory reply was given to the complainant. After this, there was a complete silence for about 9 years from the OP and the complainant time and again kept on approaching for the delivery of his flat.

5. That on 26.12.2001, a letter was received from the OP by the complainant in which it was stated that the area of the flat which was allotted to the complainant was changed from 1375 sq. ft. to 1585 sq. ft. and along with this a demand for 8th and 9th instalments of payment was also made and the balance amount due was shown to be Rs. 2,10,121.25. After this again a letter dated 8.4.2002 was received from the OP in which a demand of aforementioned amount was repeated and consequent to this the complainant sent the OP Rs. 1,55,000/- by way of Demand Drafts which were duly encashed by the OP and it was made clear by the complainant that the remaining amount of Rs. 56,000/- would be given at the time of possession of flat. The photocopies of letter dated 26.12.2001 and 8.4.2002 are attached as Annexure C-3 and C-4 with this complaint.

6. That again when nothing was heard from the OP, the complainant constantly approached the OP for the delivery of his flat and again the avoiding tactics were preferred by the OP. Again when nothing was heard for a long time from the OP, the complainant sent a reminder under Postal Cover dated 29.9.2005 in which it was stated that the possession of the flat be delivered immediately. The photocopy of reminder dated 29.9.2005 is annexed herewith as Annexure C-5 with this complaint. Again when nothing was heard the complainant through Registered AD dated 10.1.2006 sent the balance amount of Rs. 56,000/- by way of Demand Drafts which was full and final payment of the flat. The photocopy of letter dated 10.1.2006 is annexed herewith as Annexure C-6 with this complaint.”‘

33. The above extracted portions of the orders passed by the District Consumer Forum and the State Commission, Delhi and three complaintsfiled by different persons with almost identical assertions that the respondents had issued brochure containing a promise to complete the project within 36 months are more than sufficient to prove that Respondent No. 2 had in fact issued brochure and made promise to complete the project within 36 months.

34. The respondents have not disputed the fact that the complaint filed by Smt. Krishna Tomar with the allegation of deficiency in service was allowed by the District Consumer Forum and a finding was recorded that the builder (Respondent No. 2) is guilty of unfair trade practice and the appeal filed against the order of the District Consumer Forum was dismissed by the State Commission, except in so far as the rate of interest was concerned. They have also not disputed filing of complaints by Emerging Financial Services Ltd., Smt. Sangeeta Arora and Shri Rajiv Bakshi which, as mentioned above, were based on the promise contained in the brochure issued by Respondent No. 2. In each of those complaints, it was averred that even though the respondents had promised to complete the project within three years and they had paid instalments of price on that premise, the construction was not completed within the stipulated period.

35. In my view, the concurrent finding recorded by the Consumer Forums and the pleadings of the three complaints are sufficient to belie the stand taken by the respondents that they had not issued the brochure containing a promise to complete the project within 36 months. What is most surprising is that in the reply to the notice issued by the erstwhile Commission, the respondents did not specifically denied that the brochure was issued by them. Instead, it was stated that in Para 2(a) thereof that the allegation of the advertisement made by the respondents are vague and as such incapable of being replied to. The credibility of the pleadings of the respondents deserves to be judged from the fact that in Para 3 of the Preliminary Objections, they have audaciously made a false statement that vide letter dated 22.05.2002, the complainant had indicated her unwillingness to take the flat, though by that letter, the complainant had strongly protested against the delay in construction of the project.

36. From what has been stated above, it is clear that the respondents had made a false representation to the general public including Smt. Gursharan Kaur about the time within which the project was to be completed i.e. three years but did not complete the construction for more than one decade. Therefore, there is no escape from the conclusion that they are guilty of unfair trade practice as defined under Section 36-A(1)(i),(ii) and (ix) of the Act.

Re.: 2

37. The cancellation of allotment made in favour of the complainant deserves to be declaredas wholly arbitrary, illegal and capricious. It is not in dispute that Smt. Gursharan Kaur had deposited three instalments including the booking amount. The complainant, Dr. (Mrs.) Manjeet Kaur Monga deposited three other instalments (total Rs. 4,53,850/-). She did not despite further instalments because the respondents did not complete the construction within the stipulated time. For the first time a vague statement about the construction was made in letter dated 26.12.2001, which was issued after 12 years of the booking. Even thereafter the respondents did not disclose the stage-wise progress in the construction work and, as mentioned above, they deliberately misconstrued the complainant’s protest dated 22.05.2002 as her disinclination to take the flat. Between 2002 and 2005 i.e. the date on which the cancellation letter was issued, the respondents neither entered into any correspondence with the complainant nor apprised her about the progress made in the construction. Therefore, it must be held that the complainant was justified in not paying further instalments of price and the respondents committed grave illegality by cancelling the allotment.

Re.: 3

38. The next question which merit consideration is whether the Tribunal can issue a direction to the respondents to deliver the possession of the flat booked by Smt. Gursharan Kaur on 14.08.1989. This question must be answered in negative. Section 36-D of the Monopolies & Restrictive Trade Practices Act, 1969 (for short, ‘the Act’) which deals with powers of the Commission reads as under:

“Section 36D – Powers which may be exercised by the Commission inquiring into an unfair trade practice – (1) The Commission may inquire into any unfair trade practice which may come before it for inquiry and, if, after such inquiry, it is of opinion that the practice is prejudicial to the public interest, or to the interest of any consumer or consumers generally, it may, by order direct that —

(a) the practice shall be discontinued or shall not be repeated;
(b) any agreement relating to such unfair trade practice shall be void or shall stand modified in respect thereof in such manner as may be specified in the order;
[(c) any information, statement or advertisement relating to such unfair trade practice shall be disclosed, issued or published, as the case may be, in such manner as may be specified in the order.]

(2) The Commission may, instead of making any order under this section, permit any party to carry on any trade practice, if it so applies and takes such steps within the time specified by the Commission as may be necessary to ensure that the trade practice is no longer prejudicial to the public interest or to the interest of a consumer or consumers generally, and in any such case, if the Commission is satisfied that necessary steps have been taken within the time so specified, it may decide not to make any order under this section in respect of that trade practice.

(3) No order shall be made under sub-section (1) in respect of any trade practice which is expressly authorised by any law for the time being in force.”

39. The above reproduced section was interpreted by the Supreme Court in Ghaziabad Development Authority (supra) which was decided on 14.05.2008. The facts of that case were that respondent, who had been allotted a plot of land in Govindpuram Scheme filed a complaint against the cancellation of allotment by alleging that the action of the authority was wholly arbitrary. He also claimed refund of the invested amount. The complaint filed by the respondent was allowed by the Commission with a finding that the cancellation of allotment amounted to an unfair trade practice within the meaning of Section 36-A of the Act. The Commission also held that the respondent had suffered pecuniary damages and losses. Accordingly, the appellant was directed to allot to the respondent a plot measuring 90 sq. mtrs. in Govindpuram Scheme and in the alternative to hand over possession of the vacant plot of the same size in any other nearby scheme at the original rate. The Supreme Court approved the finding recorded by the Commission that the appellant’s decision to cancel the flat amounted to an unfair trade practice. This is borne out from paragraph 12 of the judgment, which is extracted below:

“It is an admitted fact that the GDA had already issued a reservation/allocation letter to the respondent and it is also a finding of the MRTP Commission that the respondent had paid the full amount of Rs. 58,000/-. This shows that the respondent was successful in the draw of lots because otherwise, where was the need for the GDA to issue the reservation/allocation letter to the respondent which also required him to make the necessary payments. In this view of the matter, we affirm the finding of the MRTP Commission that the act of the GDA amounted to an unfair trade practice.”

However, the direction given by the Commission to deliver possession of a vacant plot measuring 90 sq. mtrs. was set aside by making the following observations :

“13. Having decided issue 1 in the manner indicated above, the other question that we need to decide is whether the MRTP Commission had the jurisdiction to direct GDA to hand over possession of a vacant plot of 90 sq m to the respondent in the Govindpuram Scheme or if not available, an alternative plot in some other scheme. So far as this question is concerned, we hold that the MRTP Commission was clearly in error in directing GDA to handover possession to the respondent.

14. Under the Act, there are provisions for inquiries that can be instituted by the MRTP Commission while Section 36-D read with Sections 12-A and 12-B lay down the powers of the MRTP Commission in dealing with instances of unfair trade practices. None of the provisions seem to indicate that the MRTP Commission has the authority to do what it did in this case. The MRTP Commission has the power to impose damages or give compensation to the respondent as a mode of redressal for harm caused by the unfair trade practices, but it certainly cannot assume the powers of the civil court because the action of the MRTP Commission in this case virtually amounts to grant of specific performance.”

40. In V.N. Bharat v. D.D.A.[2008] 86 SCL 254 (SC), which was decided on 02.09.2008, the Supreme Court took cognizance of the fact that the appellant had applied for registration for Category-II flat under the 1985 Sixth Self Financing Housing Registration Scheme advertised by the respondent – Delhi Development Authority (DDA).As per the scheme, the flats proposed to be constructed by the DDA were expected to be ready within two years and the successful applicants were to pay the price in instalments. The appellant paid the first four instalments but did not pay fifth and final instalment. Thereupon, a show cause notice was issued by the DDA, the delivery of which was disputed by the appellant. He also requested that fresh demand letter may be issued indicating the amount of sixth instalment so that he may take possession. After some correspondence, the appellant paid fifth and sixth instalments. He then filed complaint under Section 36-B read with Section 12-A of the Act. The Commission held that the respondent authority was not guilty of unfair trade practice. The Supreme Court referred to the correspondence exchanged by the parties and held that the respondent has failed to prove delivery of the show cause notice and held that once that the allotment was restored, there was no justification to deny possession of the flat. Paragraph 21, 22 and 23 of that judgment read as under:

“21. Once it is established that the notice of demand for the fifth and final installment had not been received by the appellant, the other consequences, as indicated by Ms. Tripathy, namely, automatic termination and fresh allotment, cannot follow. In any event, in our view the restoration of the allotment did not amount to afresh allotment on the basis of which the fresh demand notice could have been issued.

22. Having regard to what has been stated hereinabove, in our view the MRTP Commission erred in law in shifting the onus of proof of service of the demand notice on the appellant and in discharging the notice of inquiry and vacating the interim order issued under Section 12-A of the M.R.T.P. Act. The allegation of unfair trade practice on the part of the respondent authority stands established. The decision of the Commission is, therefore, liable to be set aside.

23. The appeal is, therefore, allowed. The judgment of the MRTP Commission impugned in this Appeal is set aside. The respondents are directed to accept the sum of Rs. 1,63,512/-, which had been deposited by the appellant prior to receipt of the demand notice, together with interest, if any, accrued thereupon, in full and final settlement of their dues in respect of the flat allotted to the appellant and to hand over possession thereof to the appellant within a month from the date of receipt of a copy of this order.”

41. In Manohar Singh Bakshi v. Vice Chairman Ghaziabad Development Authority[2005] 130 SCL 535 this Tribunal considered apparently contradictory views expressed in the two judgements of the Supreme Court and observed:

“In my view, the judgment of the two Judges Bench in V.N. Bharat’s case cannot be relied upon for entertaining the complainant’s prayer because the Bench had not noticed Section 36-D of the Act and the earlier judgment of the Coordinate Bench in Ved Prakash Aggarwal’s case, in which Section 36-D was interpreted and it was held that the Commission (now the Tribunal) cannot assume the power of Civil Court and grant relief in the nature of specific performance. In view of the law laid down in Ved Prakash Aggarwal’s case, this Tribunal cannot issue a direction for delivery of possession of the flat allotted to the complainant and that too by overlooking the fact that he has not challenged the cancellation of allotment and also the fact that the flat No. KA-06 already been allotted to another person, namely Mr. Anuj Rana.”

Re.: 4

42. In my view, even though the Tribunal cannot, in view of the law laid down in Ved Prakash Aggarwal’s case, issue direction to the respondents to deliver physical possession of the flat, there is ample justification for awarding compensation by invoking Section 12-B of the Act and even otherwise, because the complainant and her legal representatives have been subjected to harassment for the period of more than 25 years. If the building had been completed within three years as promised by the respondents, the complainant may have got possession thereof and utilized the same. She could not do so during her lifetime and her legal representatives have been compelled to pursue this litigation. It is an admitted position that between August, 1989 and October, 1993, Smt. Gursharan Kaur and the complainant deposited a total sum of Rs. 4,53,850/- in the form of instalments. The respondents not only failed to complete the project within the stipulated time but also failed to return the instalments deposited by Smt. Gursharan Kaur and the complainant. The amount was returned only along with the cancellation letter and, as mentioned above, the complainant had returned the pay order with the legal notice sent on 07.09.2005.

43. Though Section 12-B empowers the Tribunal to award compensation but no criteria has been laid down by the Legislature for exercise of that power. However, keeping in view the fact that the construction of the flat was delayed by more than one decade and the amount of instalments deposited by Smt. Gursharan Kaur and the complainant totalling Rs. 4,53,850/- was retained by the respondents for a period ranging from 15 years to more than 12 years, I feel that ends of justice would be served by directing the respondents to pay compound interest @ 15% per annum to the legal representatives of the complainant.

44. Accordingly, UTPE 90/2005 and C.A. 39/2009 are disposed of in the following terms:

(i) It is declared that the respondents have acted in violation of Section 36-A(l)(i), (ii) and (ix) of the Act and they are guilty of unfair trade practice,
(ii) The complainant’s prayer for directing the respondents to deliver possession of Flat B-301 in Siddharth Shila Apartments is rejected,
(iii) The respondents are directed to pay compound interest @ 15% per annum to the legal representatives of the complainant. The interest shall be calculated on each instalment paid by Smt. Gursharan Kaur and the complainant from the date of deposit till 30.04.2005 i.e. the date on which the allotment was cancelled, and
(iv) The respondents shall pay Rs. 4,53,850/- and compound interest to the legal representatives of the complainant in terms of (iii) above within a period of three months from today. If the needful is not done, then the legal representatives of the complainant shall be entitled to file appropriate application for execution of this order.

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