Sanjay Nagar Resident's Welfare Assn.     -----   Complainant
Vs.
The Vice-Chairman,                                  -----   Opposite Party
Ghaziabad Development Authority

BEFORE :
                Hon'ble Mr. Justice V. Balakrishna Eradi, President
                Mr. Y. Krishan, Member
                Hon'ble Mr. Justice B.S. Yadav, Member.

Y. Krishan, Member

      The complainant has alleged the following deficiencies in service on Opposite Party-Ghaziabad Development Authority (for short GDA) :

i)    Undue delay in handing over the possession of flats;

ii)   Serious deficiencies in the construction of flats with the result that they were not habitable;

iii)   Non-provision of infrastructural facilities ;

iv)    Arbitrary increase in the cost of the flats ranging from Rs.25,000/- to Rs.50,000/-.

      The brief facts of the case are that : the Opposite Party GDA had floated a Self-Financing Scheme for construction and sale of 800 ready built flats at Sanjay Nagar, Ghaziabad in 1988 (Code No.546, Property Code 21C). The tentative cost of the flats was fixed in 1988 at Rs.1.70 lakhs and it was expected that the houses would be ready for allotment and occupation within two years i.e. by the end of 1990. It was however, made clear in the scheme that the cost and time of completion of construction were provisional and only after the completion of the houses, the final cost would be determined by the GDA which would have to be accepted by the allottees.

      According to the complainants, the construction work of the flats was over by September, 1990 but allotment of the flats were made only from October, 1991 onwards. In October, 1991 the O.P. GDA demanded an additional sum of Rs.25,000/- to Rs.50,000/- for each flat on account of escalation in costs. The possession of the flats was to be given only after the allottees had deposited the additional amount demanded. But according to the complaint petition, the escalation costs had been wrongly determined as this had been done by including the cost of the land on the date of handing over of the  flats and not on the basis of price of the land on the date of commencement of scheme/construction. Likewise, the cost of construction was worked out on the date of handing over of the flats i.e. in October, 1991 and not on the basis of the date of the completion construction work of the flats viz. September, 1990. The cost had further been unfairly loaded by adding profit at 10 % of the cost of the flats "including 5 % as work charge", additional charge for corner plots, etc.

      At the time of allotment and handing over of the flats from October, 1991 onwards, certain essential amenities in the form of infrastructural works were lacking and/or not had been provided viz. electricity, sewage, storm water drains, approach roads, water supply, etc. In the result according to the complainants, the houses were altogether unhabitable. Further the construction work of the houses as such was defective and the materials used were sub-standard. According to the complainants, second-class bricks have been used, was basins had not been provided in all the flats as prescribed, stair cases in a number of flats were left uncovered, the glass panes were broken, plywood door panels were swollen, warped or peeled, tiles and slabs were broken, the  electrical switches and panel boards were in damaged condition etc. In particular the water outlets of the first and second floors had been made improperly and in consequence the water ercolates to the lower floors. The electrical wires were not fitted in conduit pipes as required. There is a long catalogue of defects in construction and we have only mentioned the more important of them.

      The complainants got the houses inspected by an architect Suraj & Associates who submitted its report in October, 1993. The up-shot of the report briefly is that the material used in construction did not conform to ISI standards or the CPWD or PWD specifications, many of the fittings are missing or of very poor quality, proper water proofing treatment had not been done leading to leadages ; essential services like swerage, water supply, drainage works are not functioning properly. In fact sewerage lines and water lines have been linked very close to each other exposing the drinking water to pollution, etc.

      The complaint petition was also in due courase supported by the affidavits of over 100 persons.

      The complainant has been contested by the GDA. An affidavit was filed by a Junior Engineer of GDA on 17th April, 1993 in which almost all the allegations of the complainant in the complaint petition have been denied. The contention of the GDA is that the allottees of the scheme had taken over the possession after duly satisfying themselves and accepting the allotted houses with all the necessary fittings and signing the possession letter. According to the brochure containing this scheme, the houses were to be sold on "as is where is basis" and that no objections with regard to quality of construction would be entertained. The affidavit goes on to say "the allottees had applied with open eyes knowing  fully well about the said conditions, hence they have no right to question the same". It was also maintained that the GDA has already made available all the essential services as per the prescribed standards and that it was baseless to say that the defects existed even after the possission was given.

      As we were not satisfied with the affidavit filed on behalf of the GDA, the counsel for GDA was specifically directed to let the Commission know as to the dates on which the various infrastructural works were actually completed and made operational such as water supply, electricity, sewerage, approach roads etc. and that he should also verify to the correctioness or otherwise of the facts mentioned in the affidavits filed by the complainants.

      During the various hearings counsel for the GDA could not explain as to how the possession of the flats was offered even when the basic infrastructural facilities were not existing in 1991. The Commission have no doubt that the absence of essential infrastructural facilities would render the houses unfit for bereficial enjoyment and therefore, would constitute, a deficiency in housing construction as defined in Section 2 (1) (0) of the Consumer Protection Act. There was also no satisfactory explanation for the sub-standard materials used in construction and for various architectural defects pointed out establishing that no housing materials and fitting confirming to the ISI/CPWD/PWD standards/specification.

       An additional affidavit filed by the GDA on 25th January, 1994 explained that the flats in question are for the Middle Income Group and therefore care had to be taken to maintain the moderate rates so that members of this group could afford to purchase these flats. It was necessary to ensure that the fixtures did not unnecessarily enhance the cost of the flats. This appears to be the justification for the poor quality of materials/fixtures used.

      During the course of the hearing, it was found expedient to seek clarification as to the reasons for increase in the cost of construction. It was put to the counsel for the GDA as to how the increase in the cost of construction has been explained in the completion reports with reference to the original estimates and the revised estimates. If any whether there was any delay in furnishing the designs and drawings of the building s to the contractors, delay in inviting tenders and awarding contracts, delay in the execution of works on the part of contractors which led to the escalation in the costs or whether the escalation was entirely due to the unanticipated increase in the costs of materials and labour etc. The counsel was unable to throw light on these questions even though several opportunities were given to him to ascertain the facts by adjourning the hearings. Likewise, the counsel for the OP GDA could not throw any light as to whether there is any truth in the allegation of the complainants that the cost of land as on the date of completion of the buildings and not on the date of the commencement of the project, and the cost of construction as at the time of handing over the flats and not at the time of completion of construction of work had been arrived at.

      From the above facts it appears that :

(1)   The OP GDA had delayed the handing over of the flats it appears they had been constructed by September, 1990 but the allotment was commenced only after the GDA had determined the additional cost of the flats due to escalation. The grant of possession of flats was made dependent upon the payment by the  allottees of the additional amount. The Consumer Forums cannot go into the question of costs of flats as costs are in the nature of pricing, in the nature of consideration and not service to be rendered As however the allottees were in dire need of getting possession the same was withheld with a view to force them into payment of the additional amount on account of escalation. This in the opinion of the Commission, amounted to Unfair Trade Practice on the part of OP DGA.

(2)   It is established beyond doubt that the essential infrastucture works such as water supply lines, electricity lines, sewage, approach roads etc. in the housing complex had not been provided when the possession of the flats was commenced to be given from October, 1991. Obviously, in the absence of essential infrastructure facilities, the allottees could not beneficially enjoy them by merely taking possession of the flats. The OP GDA was, therefore, guilty of grave deficiency in service in the matter of housing construction.

(3)   It is also established beyond doubt that the houses as constructed suffeered from serious defects. Sub-standard materials and fixture and fittings were used, there are also constructional defects leading to percolation/seepage of warter from upper floors to lower floors etc. These are also serious deficiencies in housing construction on the part of the OP GDA.

      It is self evident that these deficiencies are of very serious nature. They have been further componnded the fact that there has been an increase in price (consideration) claimed by the GDA though we have, for obvious reasons, avoided examining as to whether such increases were justified perse. In the result we order as under :

I)    The allottees of the flats be given interest on the amounts collected from them by way of cost of the flats 15 % p.a. from September, 1991 till the infrastructural works are completed and the housing complex made fit for occupation. The avoidable expenditure that will have to be incurred by GDA on this account should be recovered from the Members of  the Development Authority.

II)   So far as the constructional and material defects in the flats are concerned, the OP GDA is allowed three months time to rectify them completely at its own cost to the satisfaction of the welfare association ensuring in each case that the materials used and the fixtures and fittings, are in accordance with ISI standards or CPWD or State PWD specifications for the type of houses constructed. In case this is not done with the period specified, each flat owner will be entitled to a compensation to enable him to get the rectification done by himself. For this purpose the Complainant Association may move this Commission with estimates of costs. The GDA should recover from the officials concerned the extra avoidable expenditure it has now to incur as a result of our order.

III)  In addition each of the allottees will be entitled to a compensation amounting to Rs.15,000/- on account of the enormous harassment and delay in granting of possession of the houses from September, 1991 onwards.

IV)   A sum of Rs.10,000/- is to be allowed by way of costs to the Complainants Association.