Delhi Development Authority                          ....  Appellant
Vs.
Govind Rao and others                                  ....  Respondents
 
 

      This order will dispose of the above titled appeals which arise out of a common order passed by the State Consumer Disputes Redressal Commission, Delhi on 11th December, 1991 in Complaint Case Nos.C-57/90, C-65/90 and C-84/90. These complaints were filed separately by the three appellants in appeal No. 43 of 1992. The State Commission, by a majority view disallowed all the claims of the complaints except the claim for compensation for defective workmanship with regard to the level of floors and grinding of floors and allowed Rs.7,000/- to each of the complainants to undertake the work of flooring. Feeling aggrieved against that order, the appellant Delhi Development Authority (for short'DDA') has filed the above appeal nos.40, 41 and 42 all of 1992, while the three claimants have filed a joint appeal i.e., Appeal No. 43 of 1992.

      The facts are that all the three claimants got themselves registered on different dates under the Fifth Self Financing Scheme (SFS) for category II flats with DDA and were allotted flats in Block G-17, Pocket GH-13, Paschim Puri. We do not think it necessary to give the facts of each complaint in detail. Suffice it to say that their grievances about the nature of construction can be summarised as follows :

      "(i) Construction of the flats was defective. Substandard material was used in the construction,

      (ii) Various defects were pointed out in the flats. One of the common defect was that the level of the room was not proper and the floors were neither grounded properly nor polished,

      (iii) CI and GI fittings were not of ISI specifications. There was no proper cover on all gali traps and khurras"

      It may be mentioned here that DDA charges interest @ 16 % p.a. on default in the payment of instalments while it pays interest @ 7 % p.a. for construction.

      It was the further grievance of the complainant that they were required to pay the  first four instalments being the 90 % of the estimated cost of the flats within a span of 6 to 7 months. The due date for payment of the first instalment was on 5th August, 1986 while for the fourth instalment it was on 28th February, 1987. The fifth and final instalment was to be paid when the letter of allotment of possession of said flats was to be issued to the complainants. The draw for allotment of special flats was held on different dates in 1989 and they were required to pay the fifth and final instalment along with the interest on account of late payment of the instalments, ground rent, demurrage charge and service charges. On account of late construction of the flats DDA allowed interests @ 7 % p.a on the projected amount till the date of letter of allotment. The appellants claimed interest from the DDA on 90 % of the cost of the flat from the date of payment of the instalments, while the DDA, according to them, illegally and aribitrarily demanded from those alppellants within a span of 6 to 7 months instead of 24 months as per the clause No.9 of the brochure for SFS Registere Schemes of 1982 and 1985 till the date possesion. It was in November and December, 1989 the claimants claimed interest @ 16 % which was the rate of interest charged by the DDA on default in the payment of instalments.

     All the complaints were contested by the DDA. The defence was practically similar in all the cases. It was pleaded that before taking possession, the flats inspected by the respective claimants and at that time no complaint about the defect in the flats was entered in the complaint book nor complained through a letter within the maintenance period of six months after taking over the possession. About the CI and GI fittings it was averred that those were according to specifications and were of ISI mark. It was denied by DDA that there was leakage in CI and GI joints. The cover of gali traps were being provided to the allottees concerned after taking their signatures so as to avoid complications and frivolous complaints and no cover is required for khurras. About the workmanship it was the case of the DDA that it was carried out as per the specifications of the agreement.

      About the terms of payment it was pleaded that the schedule of payment ws made on the basis of the estimated cost and payments were made according to the construction. As per terms and conditions  of the brochure, the DDA was supposed to construct all the flats within the normal period of two and a half years from the due date of first instalment and in case the completion of the flats is delayed beyond that period, it pays interest to the allottees on delayed construction @ 7 % p.a. for the period of delay only.

      The parties led evidence. It was considered by the State Commission. The main order, disposing of the complaints, was written by Dr.(Mrs.) Avtar Pennathur. After considering all the evidence, she held that she was unable to accept the complainant's contention that they be paid interest on the mode of payment of instalment and also interest be calculated at a higher rate than 7 % as given by the DDA and as menttioned in the brochure. However, she found merit in the complainant's plea of defective workmanship with reard to the level of flooring and grinding of floors. This point was not contested by the DDA before the State Commission. As such, an amount of Rs.7,000/- was awarded to each of the complainant to undertake the work of flooring and grinding which does not include polishing of the floors as it was not in the specifications. Shri B>l> Anand another member of the State Commission also wrote a separate order but in conclusion he agreed with the findings arrived at by Dr. (Mrs.) Avtar Pennathur. Justice R.N. Mittal, President of the Commission wrote a separate order. He agreed with the findings of Dr. (Mrs.) Avtar Pennathur that an amount of Rs.7,000/- be paid to each of the complainant to undertake the work of flooring and grinding. However, he was of the view that the claimants were entitled to interest from the DDA @ 7 % p.a. on the deposits from the date of payment of 4th instalment for a period of one year and thereafter at the same rate at which the DDA is charging interest from the claimants for delayed payment upto the date when possession of the flat was given by DDA. According to him, as the bargaining power between the contracting parties was not equal, the unfair and unreasonable contract can be struck down.

       The DDA has filed the appeals challenging the award of Rs. 7,000/- towards the cost of flooring while the complainants grievance in the appeal is against that part of the order of which interest which was claimed by them at a higher rate has been disallowed. We have heard the learned counsel appearing for both the parties and have gone through the records of the case.

      It may be mentioned here that vide order dated 6th August, 1992, this commission had adjourned these appeals since die as the main question arising in these cases was identical with the one pending before the Suppreme Court in an appeal preferred against the decision of this Commission in M.M. Sood Vs. Lucknow Development Authority (First Appeal No. 10 of 1990) and in that case the Supreme Court had stayed the operation of the order of this Commission. In view of amendment introduced in the Consumer Protection Act; 1986 in clause (o) of Section2 (1) by the amendment Ordinance 1993 these appeals have been taken up for hearing. Vide the amendment 'housing construction" has been introduced in the definition of 'service' as defind vide the above clause. It may also be mentioned that the said Ordinance has since been enacted into an Act. Further, the Supreme Court has since disposed of the various appeal preferred by the Lucknow Development Authority vide order passed in Lucknow Development Authority Vs. M.K. Gupta, civil Appeal No.6237 of 1993with SLP (cNo.659/91, 16942/92, C.A.Nos. 3963/89; 5534/90, 6237/90, 54257/90, 2954-59/92) decided on November 5, 1993. The appeals filed by the Lucknow Development Authority and some builders were dismised by the Supreme Court upholding the orders of this Commission in M.M. Sood's case (First Appeal No. 10 of 1990 decided on May4, 1990). In sood's case this commission has followed the order of this Commission given in U.P. Avas Evam Vikas Parishad (Housing & Development Board) Vs. Garima Shukla & Ors, 1 (1991) C.P.J.I. In Garima Shukla's case (Supra) this Commission has held that the Housing and Development Board has entered in serving  the public in the matter of providing Housing by acquisition of land, development of sites; construction of houses therein and allotment of flats/houses to the public and thus Board is clearly engaged in rendering service for consideration to the public.

      First we take appeals filed by the DDA. It was argued on behalf of the DDA that the term "Housing Construction" does not include "Houses". This argument has been noticed just to reject it. A fully completed house will also fall within the definition of "Housing Construction" when such a project has been undertaken by private builder or Authority or Board constituted under some Act.

      It was next argued that in the Act under which the Development Authority has been constituted, it has been provided that the defects in construction should be brought to the notice of the Authority within six months of taking possession and therefore, as the present complainant did not bring the defects in the construction to the notice of the Authority either at the time of taking possession or within six months there after, the present claim for compensation for the alleged defects in the houses is time barred. We do not find any force in this argument also. A defect may be noticed within six months of the possession or it may develop later on. We are of the opinion that a consumer can complain about a defect in the rendering of service even after the expiry of the above mentioned period of six months, provided the claim has been made within the time provided under the general law, i.e., law of limitation. Though the said Act is alo not applicable to the complainants filed under the Act but to discourage stale claims, the Commission has been applying the principles as laid down in the said Act. It is not the case of the DDA that the present complaints are barred under the general law of limitation . Therefore, this argument about the limitation is rejected.

      Lastly, it was argued that the claim of the complainants about the defective flooring is not genuine. Dr.(mrs.) Avtar Pennathur in her order has remarked :
      However, I do find merit in the complainants plea of defective workmanship, with regard to the level of flooring and grinding of floors which has not been contested by the respondent."

The other Member and the President of the Commission have agreed with the finding of Dr.(Mrs.) Avtar Pennathur. Therefore, when this point about the defective flooring was not contested by the DDA before the State Commission, we cannot allow it to agitate the matter before us. Moreover, there is sufficient evidence on the file to support that grievance of the complainants. Hence, all the three appeals filed by the DDA are liable to be disimissed.

      As far as the appeal of the complainants is concerned, it is also liable to be dismissed. This Commission cannot go into the terms of agreements entered into by the parties about argeed rate of interest chargeable by DDA on the defaulted instalments or payble by it for the delayed construction. We are unable to understand how the various claimants can getout of the terms of the agreement about payment of interest particularly. When they have taken possession of their respective flats after making payment in accordance with the final demand letter. The claimants are not entitled to keep the benefit derived under the contract and to repudiate it partly so far as other party is concerned.

      Moreover as held by this Commission in Revision Petition No. 40 of 1992. Southern Investments Vs. A.S. Krishnamurty decided on 13th September, 1993 and First Appeal No. 241 of 1991 Gujurat Housing Board Vs. Dalania Amritial Fulchand & Ors. decided on 7th October, 1993, the question of pricing of a flat of house cannot form the subject matter of a consumer dispute.

      In the light of the above observations, we dismiss all the above four appeals. In the circumstances of the case, we leave the parties to bear their own costs in each appeal.