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UTTAR PRADESH STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, LUCKNOW
Hon’ble Mr. Justice K.C. Bhargava, President &
Mr. D.D. Bahuguna, Member
SMT. MANORAMA SINGH—Complainant
versus
LUCKNOW DEV. AUTHORITY—Opposite Party
Complaint Case No. 259/SC of 1993—Decided on 20.10.1999
CONSUMER PROTECTION ACT - SECTION 2(1)(g) - DEFICIENCY IN SERVICE - HOUSING SCHEME - ALLOTMENT OF FLAT - INCREASE IN COST OF FLAT - POSSESSION NOT DELIVERED - REFUND OF DEPOSITED AMOUNT WITH INTEREST - COMPENSATION - DAMAGES - CONSUMER DISPUTES REDRESSAL COMMISSION, UTTAR PRADESH, LUCKNOW BENCH
Fact of the Case:
Complainant applied for a house in Lucknow Development Authority's Nehru Enclave, Gomti Nagar Housing Scheme, Lucknow under 'deferred payment system' of hire purchase. Complainant deposited Rs. 30,000/- on 27.3.1989 and paid a total of Rs. 1,61,250/- in instalments. The cost of the house was initially declared to be Rs. 4,51,001/- to be paid in seven instalments of Rs. 18,750/- each every quarter. However, the construction of the flats was delayed and the cost was increased to Rs. 6,42,000/-. The complainant was asked to pay this amount, but he refused. The complainant filed a complaint with the Consumer Disputes Redressal Commission, Uttar Pradesh, Lucknow Bench, claiming a refund of the deposited amount with interest, compensation, and damages.
Finding of the Court:
The Consumer Disputes Redressal Commission, Uttar Pradesh, Lucknow Bench, held that the Lucknow Development Authority was in breach of the condition of the brochure by not handing over possession of the flat to the complainant after he had deposited 40% of the total price. The Commission also held that the increase in the cost of the flat was not justified as the construction of the flat was not completed. The Commission directed the Lucknow Development Authority to refund the deposited amount of Rs. 1,61,250/- along with interest at the rate of 18% per annum from the respective dates of deposits till the date of payment. The Commission also awarded compensation of Rs. 50,000/- and costs of Rs. 2,000/- to the complainant.
Issues: 1. Whether the Lucknow Development Authority was in breach of the condition of the brochure by not handing over possession of the flat to the complainant after he had deposited 40% of the total price? 2. Whether the increase in the cost of the flat was justified as the construction of the flat was not completed?
Ratio Decidendi: 1. The Consumer Disputes Redressal Commission, Uttar Pradesh, Lucknow Bench, relied on the brochure issued by the Lucknow Development Authority, which stated that possession of the flat would be given after payment of 40% of the total price. The Commission held that the Lucknow Development Authority was in breach of this condition by not handing over possession of the flat to the complainant after he had deposited 40% of the total price. 2. The Commission also held that the increase in the cost of the flat was not justified as the construction of the flat was not completed. The Commission relied on the fact that the complainant had already deposited 40% of the initial cost of the flat, and that the increase in cost was substantial.
Final Decision: The Consumer Disputes Redressal Commission, Uttar Pradesh, Lucknow Bench, partly allowed the complaint and directed the Lucknow Development Authority to refund the deposited amount of Rs. 1,61,250/- along with interest at the rate of 18% per annum from the respective dates of deposits till the date of payment. The Commission also awarded compensation of Rs. 50,000/- and costs of Rs. 2,000/- to the complainant.
Mr. Justice K.C. Bhargava, President—The present complaint has been filed claiming an amount of Rs. 1,00,000/- as damages and compensation with a direction to give possession of house after receiving the rest of the amount of the original price at Rs. 4,50,000/- by opposite party.
2. It is alleged that the opposite party had advertised for residential house in Nehru Enclave, Gomti Nagar Housing Scheme, Lucknow under ‘deferred payment system’ of hire purchase. The complainant applied for a house in the said scheme for four room Super Delux flat and deposited Rs. 30,000/- on 27.3.1989. The cost of the house was declared to be Rs. 4,51,001/- to be paid in instalments. An allotment letter dated 12.10.1990 was issued in favour of the complainant of a ground floor flat No. 8R/123 in category known as “Roopayan”. A photostat copy of that letter is attached as Annexure to the complaint. The price was to be paid in seven instalments of Rs. 18,750/- each every quarter. On 30.10.1990 complainant sent a sum of Rs. 18,750/- as first instalment. The complainant also demanded copy of challan to be sent on his Ghaziabad address. The complainant paid a sum of Rs. 1,31,250/- in seven instalments. In all Rs. 1,61,250/- including initial deposit of registration amount of Rs. 30,000/- was made. According to the rules published by the Lucknow Development Authority, in case of default of instalments, the interest at the rate of 16% per annum will be charged. The possession of the flat was to be delivered, according to the brochure, on payment of 40% of the total amount.
3. On account of some dispute, as informed by the opposite party, the construction of the flats could not be started and the cost of the flat has been enhanced to Rs. 6,42,000/-. The complainant was asked to pay this amount. The opposite party had no right to wrongly enhance the price of the flat inspite of the fact that the house has not been completed as yet. There is a deficiency in service on the part of the opposite party in not providing a flat to the complainant as promised. The complainant, therefore, filed the present case.
4. Complainant has prayed that he be allowed to deposit the instalments for the rest of the amount to cover up the price of Rs. 4,50,000/- and be paid interest at the rate of 16% per annum on the entire amount deposited by him so far. The price of the flat may not be allowed to be increased. Compensation worth Rs. 50,000/- was also claimed alongwith Rs. 50,000/- as damages for deficiency in service. He also claimed possession of the house.
5. The opposite party, Lucknow Development Authority was served notice and Mr. Raghuvansh Kumar Singh, Advocate filed his power on its behalf. The opposite party was given several opportunities to file written statement since 1994 but no written statement was filed. Hence the case was ordered to proceed ex parte on 5.7.1997. The complainant filed ex parte evidence. We have heard learned Counsel for the complainant Mr. M.H. Khan.
6. As seen in the earlier part of the judgment the complainant had deposited 40% of the price of the flat within time. According to learned Counsel for the complainant the possession of the house was to be given by the opposite party on deposit of 40% of the total price of the house. But the possession has not been delivered so far. According to learned Counsel this condition of handing over possession on payment of 40% payment has been given in the brochure under Rule 7.3 which deals with ‘hire purchase’. Sub-clause 3(b) provides that the “possession of the appartment will be given after payment of 40% price”. Hence this provision in brochure is clear that on deposit of 40%, the Development Authority was bound to hand over the possession of the appartment. The opposite party, Lucknow Development Authority, has not handed over possession and as such it has breached the condition of the brochure. According to learned Counsel the rest of the price of the house was not deposited because possession
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