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CASE NO.: Appeal (civil)  3967-3968 of 2004

PETITIONER: Chief Administrator PUDA and Another             

RESPONDENT: Mrs. Shabnam Virk                                                

DATE OF JUDGMENT: 23/03/2006

BENCH: ARIJIT PASAYAT & TARUN CHATTERJEE

JUDGMENT: J U D G M E N T

ARIJIT PASAYAT, J.

Challenge in these appeals is to the order passed by the  National Consumer Redressal Commission, New Delhi (in  short the ’Commission’).  The Commission held that as delay  in handing over the possession was clearly established and the  reasons in price escalation of the house was not proved or  established, the respondent was entitled to get the house at  Rs.6.3 lacs instead of Rs.7.44 lacs as demanded by the  appellants.   

Background facts in a nutshell, as projected by the  appellants are as follows:

On 15.8.1995 the appellants floated a scheme for  allotment of 784 four story MIG (SUPER) flats on hire  purchase basis at SAS Nagar,(Mohali). The scheme opened on  15.8.1995 and was to close on 14.9.1995.  As per the  advertisement inviting applications for allotment under the  said scheme, the tentative cost of the flat was fixed at Rs.6.3  lacs.  However, condition (2) therein clearly specified that the  price quoted is purely tentative and based on the present cost  of construction and that it was likely to be revised on the  higher side by the time houses are completed.  The said clause  reads as under:

"The price quoted is purely tentative and  is based on the present cost of  construction.  It is likely to be revised on  the higher side by the time houses are  completed."

The advertisement further stated that the allotment shall  be governed by PUDA under rules and regulations  framed/amended from time to time.

On 27.3.1996 pursuant to the aforesaid advertisement, a  large number of applicants (including the respondent) applied  for a MIG Super Category flat under the scheme in the  prescribed Proforma Clause 12(ii), (iii) & (iv) of the said  Proforma read as under:

"(ii) I have carefully gone through and  understood the terms and conditions of  the scheme applied and do hereby

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undertake to abide by the same.

(iii) I also undertake to pay higher cost  due to fluctuations in the prices of  building material or due to any other  reason.

(iv) I shall abide by the terms and  conditions of the allotment made by the  PUDA as amended from time to time and  shall enter into such agreement in any  manner and at any time, as stipulated by  PUDA."

Prior to the construction of the flats, the first draw for  allocation of flats, was held on 7.12.1995.  On the basis of this  draw held prior to the construction of flats, allocation letters  (including allocation letter dated 27.3.1996 issued to  respondent) were issued. In the said allocation letters, the  tentative cost of each flat was stated to be Rs.6.30 lacs. The  said figure was purely provisional, as was made explicit by  Note (i), (ii) & (iii) contained in the said allocation letter, which  read as under:

"(ii) The aforesaid price is purely  tentative.  The actual price shall be  determined on completion of House/Flat  and you shall be liable to make payment  of the revised price of these  Houses/Flats, if any, at the time of  allotment.

(iii) Earnest Money already deposited with  the Board will be adjusted with the  instalments required to be deposited  before taking over possession."

Note (i) contained in said allocation letters gave the  tentative date when the flats were expected to be completed.   The said note stated:

"Houses/Flats are likely to be completed  by April 1997.  This date is however  tentative and may change."

The applicants accepting the allocation were required to  submit affidavits to the effect that they would abide by the  terms and conditions of allocation and the respondent  submitted the required affidavit dated 15.4.1996.  784 MIG  (Super) flats were completed in the years 1998 and second  draw was held for allotment of specific flat numbers to  applicants successful in the first draw, including the  respondent and allotment letters dated 21.8.1998 were issued  to the applicants including the respondent.    

On 16.10.1998 the respondent accepted the terms and  conditions of the allotment letter by tendering an affidavit  dated 16.10.1998 to abide by the terms and conditions of the  allotment letter as well as of the provisions of the Punjab  Regional and Town Planning and Development Act, 1995 (in  short ’the Act’) and rules framed thereunder.

On August, 1998 at the time of issue of the allotment  letter the base price of the flats in question was calculated to  be Rs.7,67,000/-. Further a slab system was fixed for different

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floors which is as follows :

Ground Floor  -  Rs. 8,05,400 (5% extra on the base  price)

First Floor             -     Rs. 7,67,000 (the base price) Second Floor  -   Rs.7,51,600 (2% less than the base  price)

Third Floor     -  Rs. 7,44,000 (3% less than the base    price)

Upon receipt of the respective allotment letters, the  applicants, including the respondent who opted to accept the  allotments, furnished affidavits clearly stating that they would  abide by all the terms and conditions of the allotment and by  the provisions of the Act and the rules framed thereunder from  time to time.

On 21.10.1998 upon depositing 25% of the price of the  flat as stipulated in the allotment letter, the respondent  took  possession of the flat.  On 12.5.1999 the respondent filed  complaint No. 486 of 1999 dated 12.5.1999 before the District  Consumer Disputes Redressal Forum, Chandigarh (in short  ’the District Forum’)  claiming, inter alia, that he was not liable  to pay any amount over and above the price which was  advertised while inviting applications for allotment much prior  to the construction of the houses.  The District Forum by  order dated 17.10.2001 held that the price quoted was purely  tentative and it was likely to be revised on the higher side by  the time the houses are completed as there was clear  condition to that effect in the advertisement.  However, it  directed the appellants to pay interest at the rate of 12% on  the amount of Rs.1,03,000/- for a period of 1 year and 4  months on the ground that houses were likely to be completed  by April, 1997 but the possession was handed over in August,  1998.  Both the appellants and respondent preferred separate  appeals before the State Commission,  Chandigarh.  The said  Commission dismissed the appeal filed by the appellants and  allowed the other appeal.  The State Commission directed the  appellant No.1\026Authority to charge only the price which was  advertised while inviting the application for allotment and to  pay interest at the rate of 12%.  A revision petition was filed  before the National Commission under Section 21(b) of the  Consumer Protection Act, 1986 (in short the ’Consumer Act’).   The Commission held that there was no delay on the part of  the appellant No.1\026Authority in handing over the possession.  However it held that only the price which was advertised while  inviting application for allotment could be charged.  The  Review Application filed was dismissed.

In support of the appeals, learned counsel for the  appellant submitted that the complaint was thoroughly  misconceived as the allotment was made on 21.8.1998 and the  price indicated was Rs.7.44 lacs. Same was accepted by letter  dated 16.10.1998 and the terms of acceptance were contained  in the accompanying affidavit.  It was clearly stated in the  affidavit dated 16.10.1998 that the allotment of the MIG  (Super) house was accepted and the deponent undertook to  abide by all the terms and conditions of the allotment letter.   With reference to the undertakings learned counsel for the  appellants submitted that the order of the National  Commission is clearly erroneous.  The clause which has been  used to fasten liability on the appellants clearly stipulates that  the price quoted is purely tentative and is based on the

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present cost of construction and likely to be revised by the  time the house was completed.  It was, therefore, submitted  that the demand raised by the appellants was justified and the  National Commission did not appreciate the position correctly  and held that the respondent was liable to pay at the earlier  rate.

Learned counsel for the respondent on the other hand  submitted that price quoted could be changed only if there  was escalation in the cost of construction.  As the details filed  would go to show, there was no increase in the cost of  construction, rather there was decrease.

It is to be noted that the respondent herself had accepted  in the undertaking that she accepted the allotment of the  house and undertook to abide by all the terms and conditions  of the allotment letter. It is not in dispute that in the allotment  letter the figure as demanded has been reflected.  That being  so the respondent was liable to pay the amount as stipulated  in the allotment letter.   

As there is no dispute that the respondent had in fact  filed an affidavit clearly indicating that she undertook to abide  by all the terms and conditions of the allotment letter, the  amount indicated in the allotment letter was the amount in  respect of the allotment of the house.  We find nothing in the  quoted clause to show that the increase was possible only  when there was an increase in the cost of construction.    The clause quoted above does not reflect any such intention of  the parties.

Above being the position the National Commission was  clearly in error granting relief to the respondent.  The appeals  are allowed.   No costs.