The General Consumer Protection Welfare    ---   Complainants
Association & Ors.
Vs.
Ghaziabad Development Authority & Anr.     ---   Opposite Parties

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 Opposite Party floated a Self financing and hire purchase housing scheme in 1988 called the Rajendra Nagar Housing Scheme, (Housing Code No.526 & Property Code No.13C) Ghaziabad. The number of houses was only 18. The complaints of the complainants are :

i)    An increase in the cost of each house by Rs.1,63,200/- which has been described as arbitrary and exorbitant and illegal;

ii)   Inordinate delay in the construction and handing over of the possession of the houses in a habitable condition.

iii)  Construction of sub standard houses & use of sub standard materials.

      The complainants have claimed the monetary reliefs as set out in para 2 (a), 3, 4 & 5 and para (e) after para 30 of their complaint petition by way of interest on the amount paid by the complainants, damages etc.

      Under the scheme, the allottees were required to pay the estimated cost of the flats in installments. 45 % cost of the flats amounting to Rs.1,67,400/- including the Registration amount and Reservation amount was required to be paid by 30th September 1990 and was a precondition for grant of possession of the houses. The balance amount payable was Rs.2,04,600/- for each flat. The final price was to be determined on the completion of the flats and was recoverable. Payment Schedule for the balance was to be fixed at the time of allotment cum possession.

      Though the houses were expected to be ready for allotment by September, 1990 according to the complainants the possession of houses was offered only at the time of filing complaint viz. 2nd February, 1993. The allottees were required to pay the balance amount in lumpsum before grant of possession. Whereas payment was to be made in installments as per schedule to be fixed.

      The allottees were issued the allotment cum possession letters in April/May, 1992 and the total cost of the houses was shown as Rs.5,35,200/- per house. There was an increase of Rs.1,63,200/- over and above the total estimated original cost of Rs.3,72,000/-. Some extra amount was also demanded in respect of the fourth installment payable by 30th September, 1990. The balance revised amount was required to be paid in 20 half-yearly installments and the first installment was due on 30th March, 1992 but the possession letters along with the demand schedule was also received by the allottees only in May/June, 1992.

      According to the complaint petition, the increase in the costs was attributed by the Opposite Party to (a) increase in the covered area by 40.83 sq. mts. (from 124.99 sq. mts. as per the brochure of the scheme to 165.82 sq. mts. and (b) the prevalent sectoral rate of land at the time of registration was only Rs.250/- per sq. mt. but at the time of allotment and grant of possession, the rate had gone up to Rs.635/- per sq. mt. Thus increase in the area and land price increased the costs by Rs.64,000/- per house.

      The complaint petition further points out that by July, 1992 the houses were not ready for possession in a habitable condition. The complainants have briefly charged the Opposite Party GDA with the following deficiencies in services:

1)    Increase in the cost of houses by more than 43 % unilaterally and arbitrarily in the absence of an escalation clause ;

2)    Claiming enhancement in the cost of construction beyond the promised date of completion of the houses viz. September, 1990.

3)    Charging the price of land on which the houses are constructed at Rs.650/- per sq. mt. the rate present at the time of allotment and possession in 1992 as against Rs.250/- prevalent at the time of registration of the complainants for allotment of houses. According to the  complainant this has increased the cost of houses by Rs.65,000/-.

4)    Increase in the area of the land of each house by about 41 sq. mt.

5)    Delay in the construction of the houses and handing over their possession. The complainants have also further pointed out that according to their information, the running bills of several of the civil contractors engaged for constructing houses by the O.P. GDA had not been paid with the result that due to non payment of the bills, the completion of works suffered and this was another factor responsible for cost escalation and delay in the completion and allotment of houses.

      The OP GDA in its counter affidavit has denied all the allegations regarding deficiency in service on its part. It has taken a technical objections that the complainant was not a "Consumer" under the Consumer Protection Act in relation to transfer of immovable property which is neither goods nor services. It has also explained that the scheme was being financed by the HDFC who were to grant 55 % of the estimated cost of the construction as loan. Because of non-reeipt of the loan from HDFC the schedule of  payments by the allottees was modified and the allottees were required to make the payment of the balance in the amount in lumpsum with the issue of allotment cum possession letters. The OP had not made any firm commitment regarding the costs and the date of completion ; these were only estimated. According to the OP GDA the houses in question were completed before April, 1992 and the allotment cum possession letters were issued on 29th April, 1992 and the allottees were asked to deposit the balance including the additional cost of flat.

      In their further reply the complainants have pointed out that at no point of time they were informed that the OP GDA did not receive the loan from the HDFC necessitating revision in the payment schedule by the allottees necessitating payment of the balance in one  lumpsum, that the area of the land had to be increased from 125.07 sq. mt. to 165.82 sq. mt. nearly 31 % increase over the original area.

      The question of increase in the area by nearly 31 % is not only relevant to the cost of the land but also to the extra cost of foundations work and the structural works on larger area. In this connection the complainant has observed "it is also not stated by the GDA whether the foundations of the flats were also changed to suitably accommodate the larger area. If the foundations have not been changed, it would weaken the structure which has been erected on the foundations meant for a smaller area". This matter therefore, affects not only the cost of construction but also the strength of the structures and therefore, the quality of construction.

      Even after the issue of allotment cum possession letters in April, 1992 the complainants found the houses incomplete and inhabitable and this was placed on record by the complainants in their letter of 24th July, 1992. The Complainant Society filed an affidavit stating that as late as on 2nd of March, 1994 the houses were not in the last in a habitable condition. There was no electrical writing and  electrical fittings in the houses and there were no pipes and taps in any of the bath-rooms, toilets and the kitchen ; no toilet seats/commodes have been provided in the toilets. There were no flush tanks in any of the toilets/bath-rooms. There was no wash basins in any of the toilets and the bath-rooms. There were cracks appearing in the walls and there was no sink in the kitchen and without any water pipes and tubes. There were no glass panes in the windows in the kitchen. The wooden panels and staircase steps etc. were broken. We have only enumerated more important of the defects and deficiencies in the construction of the houses. A member of the complainant society said to be a qualified Civil Engineer Graduate holding a B.Tech degree from IIT, Delhi has filed this affidavit. The complainants had also submitted photographs of the buildings to indicate that they were incomplete/defective. Further, the complainant filed an affidavit in evidence on behalf of the complainants.

      The GDA in its counter affidavit of 29.3.1993 denied all the allegations of the complainants and maintained that the houses were completed on 30th April, 1991 and ready for possession being given from 30th April, 1992. It has pleaded that the construction of buildings was given to contractors and therefore, delay in construction was for reasons beyond the control of the OP GDA. The disputes with the contractors which arose from time to time had to be resolved including by references for arbitration and there was also labour problems and also non-availability of materials like cement and steel etc. It was delay in construction beyond their control which resulted in the increase in the costs of construction. It has also explained that there were other factors in causing the  delay and escalation in the prices of houses viz. increase in the area of flats. It has also stated in para 11 of its affidavit of 2-5-1994 as under :

"That that person cannot be delivered possession even after construction unless the colony is developed which is collective effort of various departments for example, for the purpose of water supply and sewerage and drainage system the Authority has to depend on Jal Nigam. Similarly for  electrification, Authority has to depend on the Electricity Board and so on so forth. Sometime there is procedural delay by the concerned department for which the Authority cannot be blamed".

      As we are not satisfied with the replies filed by the OP GDA we sought clarifications at the hearings, from its counsel. As regards the increase in the cost of construction with reference to the original estimates, revised estimates, completion reports and analysis of reasons for escalation etc., Justification for charging the cost of land with reference to the land rates prevalent at the time of completion of the construction and not at the rate on which the lands had acquired or not the land rates prevalent at the time of commencement of construction with a view to see as to show how far the escalation cost was justified. More importantly, we sought reasons for delay in completion and delivery of the houses and with the serious defects in construction alleged by the complainants. During the hearing  on 22nd June, 1994 counsel for the Opposite Party admitted that the affidavit which had been filed by his client in pursuance of the orders of this Commission on 24th February, 1994 did not contain particulars with the help of which he could furnish clarifications to the questions raised from the Bench. He was therefore, permitted to file supplementary written submissions. These were filed by him on 13th July, 1994. The OP in its written submissions has explained that this delay was due to delay in award of construction work to contractors after inviting tenders and awarding the contract. This delay was due to various reasons such as labour problem, delay in the availability of construction materials like cement and steel and in different periods disputes with contractors etc., and these were beyond the control of the Authority.

      We find that averments in the counter affidavits filed by the OP-GDA are vague and too general. While this Commission may not take cognizance of the escalation in the costs as pricing by itself cannot be deemed to be a deficiency in 'service', however, the delivery of possession had been made conditional on the payment of additional prices and this would amount to unfair trade practice if the increase is unjustified. In any case the affidavit does not explain as to how the allotment of the houses could be made in April, 1992 when they were not complete in important respects and therefore, were not habitable.

      The evidence discloses considerable delay in the completion and allotment of houses for which no adequate reasons were furnished. The complaint and evidence regarding use of sub standard materials in the houses under construction also remained unrebutted. In short we are satisfied that the GDA has been deficient in rendering service in respect of housing construction. We therefore, grant the following reliefs to the Complainants for delay in delivery of possession.

1.    The GDA should pay interest @ 15 % on the amount deposited by each allottees from September, 1991 (one year after the original anticipated date of completion) till the date of actual handing over of possession of the houses after rectification of all defects.

2.    The GDA should repair and remove all the defects in the houses and replace defective/sub standard fixtures & fittings by fixtures and fittings of ISI mark or conforming to CPWD/State PWD specifications at its own costs within a period of 3 months.

3.    The GDA shall pay compensation amounting to Rs.10,000/- to each of the  Complainants for the various deficiencies in service & consequent harassment suffered by the Complainants.

4.    We also allow a total sum of Rs.5,000/- as costs.