DIRECTOR GENERAL OF INVESTIGATION And REGISTRATION vs Ghaziabad Development Authority

THIS Restrictive Trade Practices Enquiry was initiated on receipt of an application from the Director General of Investigation & Registration (DG in brief) under Section36B(c) of the Monopolies and Restrictive Trade Practises Act, 1969 (Act in brief) alleging therein that M/s. Ghaziabad Development Authority (respondent in brief) have indulged in unfair trade practices within the meaning of Section 36A of the Act, 1969. The basis of DG''s application was a complaint received from one Mrs. Sudha Sharma, Block 67, Quarter No. 9, Sector-1, Pushp Vihar, New Delhi-110001. The Commission finding a prima facie case issued the Notice of Enquiry dated 20.4.1995, which inter alia states as under :

"Whereas the resPondent namely, M/s. Ghaziabad DeveloPment Authority is an Undertaking of the Government of Uttar Pradesh and is engaged inter alia in the business of real estate, i.e. making available develoPed Plots and built uP flats to the desirous members of the Public.

And whereas the Director General, in the wake of a comPlaint from Mr. Sudha Sharma of PushP Vihar, New Delhi has filed an aPPlication under Section 36B(c) of the MRTP Act, 1969 stating the following :

That the Director General (Investigation & Registration) received a comPlaint dated 30th SePtember, 1994 alleging that Pursuant to rePresentations made by the resPondent, the houses will be comPleted within 2 years from the date of reservation, that the handing over/ Possession of flats will take aPProximately 18 months, that the imPugned category of flat would cost Rs. 32.000/- only, that the original Plan envisaged double storey houses, that the comPlainant aPPlied for allotment of flat and that the resPondent in its letter dated 30.11.1989 informed her as declared successful in allotment of flat and called uPon her to Pay the balance amount of Rs. 28,800/- (as Rs. 3,200/- was already dePosited by her alongwith aPPlication) and that the comPlainant dePosited the entire balance amount way back in 1991 as Per Payment schedule.

AND whereas it is complained that the respondent in its letter dated 25.12.1993 while informing the allotment of Flat No. F/217 called upon the complainant to give her consent in respect of increase of cost of flat from Rs. 32,000/- to Rs. 80,000/- against which a representation was made by her to the effect that the escalation is unreasonable especially when full and final payment had been made long back in 1991 that the respondent plans to build 3 storey houses while 2 sotrey houses were envisaged originally, that Director General (Investigation and registration) addressed a Registered letter dated 3.10.1994 soliciting comments of respondent on the complaint but the letter so addressed did not evoke any response. And whereas the Director General in his application has mentioned that no progress has been made with regard to the housing scheme floated by it, that the respondent has decided to build 3 storeyed houses in place of two storeyed houses originally planned and shown, that the cost of the house has been raised from Rs. 32,000/- to Rs. 80,000/-, that the original cost in respect of the flat was deposited by the complainant in 1991 as demanded by the respondent, that though it was claimed that the house would be completed within 3 years from the date of reservation but the houses are yet to be completed and that further the respondent has failed to hand over possession of the house within 18 months as represented.

THE trade practice of not completing and handing over possession of flats within the represented stipulated time, increasing cost of flats in an arbitrary manner without sufficient grounds, changing/altering the original scheme for construction from two storeys to three storeys tantamounts to unfair trade practices within the meaning of Section 36A of the MRTP Act, 1969." A reply to the said Notice of Enquiry was filed by the respondent contradicting the allegations as listed in the NOE and the Director General of Investigation & Registration (hereinafter referred to as DG) has filed his rejoinder controverting the averments made by the respondent in their reply and reiterating that the respondent was indulging in the unfair trade practices as stated in the Notice of Enquiry. After completion of the pleadings, following issues were framed on 25.8.1995 : 1. Whether the respondent is or has been indulging in the unfair trade practices as indicated in the NOE ? 2. If the answer to the foregoing issue is in the affirmative, whether the unfair trade practices are prejudicial to the public interest or to the interest of the consumer or consumers generally ?

Dg had also moved an application under Regulation 65 of the MRTP Regulations, 1991 for seeking certain interrogatories and discovery of documents. Since the reply/objections to this application was not filed by the respondent, the case was directed to be listed for ex-parte evidence on 17.11.1995. However, on the subsequent date, the respondent moved an application and the respondent was permitted to participate in the proceedings and was allowed to file its evidence in the form of counter-affidavit and reply to the Dg application under Regulation 65, which was filed subsequently and the documents were discovered to the satisfaction of the Dg.

ON 13.3.1997, an affidavit was filed by the respondent that the plot in question has been sold to the U.P. Government and the possession has already been given in January, 1996. The Commission did not consider the filing of afore said affidavit appropriate since the pleadings were already completed and directed that this affidavit will be considered at the time of final arguments.

THE complainant also filed a compensation application praying therein either to hand over the possession of the flat in question without any further delay and without any enhancement or refund of amount of Rs. 32,000/- alongwith 18% interest. It was also prayed in the compensation application that the respondent be directed to pay a compensation of Rs. 3.00 lacs for the mental agony and financial loss suffered. This compensation application was directed to be heard alongwith the main enquiry. Arguments were heard of DG and Mr. Girish Chandra, Advocate for the respondent. In addition to the oral arguments, both the parties submitted their written submission in both the UTP as well as the compensation application.

The complainant in this case has applied for a flat in the Govinda Puram Housing Self Financing Scheme - Basera Category - Code No. 549 and deposited Rs. 3,200/- vide Application Form No. 3879, The respondent vide its letter dated 30.11.1989 intimated the complainant that a draw was held on 25.10.19 89 and that he was successful. As per this letter, the complainant was required to pay the remaining cost of Rs. 28,000/- in half yearly instalments, which was paid by the complainant accordingly. The last instalment was paid by the complainant during December, 1991 which is not disputed by the respondent. This being self financing scheme, as brought out in the Brochure, the respondent was to give possession of the flat within 18 months from the closure of the scheme i.e. around December, 1990 whereas the injunction order was passed by Allahabad High Court in April, 1991. This means that till 24.4.1991, there was no injunction operating.

THE respondent in this case has taken the same stand which he had taken before the Commission in the matter of Compensation Application No. 94/95, Ms. Suvidha Chauhan v. Ghaziabad Development Authority, decided by this Commission on 18.9.1996. In the said case, the Commission while holding that the respondent has indulged in unfair trade practices inter-alia observed as under : "Essentially the controversy boils down to the delay on the part of the respondent in the development of the Govinda Puram Scheme resulting in a situation contrary to what had been originally represented by the respondent to the applicants, that possession of plot was expected to be given during 1991. Thus, in the event the misrepresentation is established to have taken place, provisions of Section 36A(1) of the MRTP Act will be attracted."

Surprisingly, there spondent conducted adraw for giving specific number to the allottees on 20.10.1993 and the House No. F/217 was allotted to the complainant when the injunction granted by the Allahabad High Court was still operating. Hence, it is established that the respondent on the one hand took the shelter of the Allahabad High Court injunction and on the other hand went ahead with the draw in order to pacify the registrants. The seacts of respondent are a clear picture of false representation attracting the provisions of Section 36A of the MRTP Act.

NOT restraining with the above GDA on 30.8.1994 informed the complainant to give consent for increased cost of this flat at Rs. 80,900/- which is roughly 2% times high than the original cost. The grounds for increase are not extraordinary but are normally provided by the building agencies. The respondent vide his letter also intimated the complainant that the scheme has been altered from two storeyed flats to three storeyed flats which is according to the respondent is as per provisions contained in the Brochure. However, Clause 16.20 of the Brochure reads as under : "Ghaziabad Development Authority reserves the right to amend any term or condition of this scheme till the time of allotment, and as such amendment or amendments shall be binding on the applicants/allottees."

Hence, this clause means that the respondent can alter the scheme upto the stage of allotment only. Here again the respondent acted maliciously. Interestingly, vide an additional affidavit dated 12.3.1997 filed by Shri V.S. Chauhan, Assistant Engineer of the respondent authority stated that Pocket in Govinda puram where House No. F-217 has been allotted to the complainant has been sold as a whole to the Shanti Suraksha Bal of U.P. Government.

IN view of the foregoing, it is established that the respondent has indulged in the unfair trade practices within the meaning of various clauses of Section 36A of the MRTP Act as alleged in the main complaint as well as in the compensation app lication. Accordingly, we hold that the respondent has indulged in unfair trade practices, as alleged in the Notice of Enquiry. Hence, the first issue is decided in favour of the complainant/applicant and against the respondent.

WE also hold that the aforesaid trade practices are prejudicial to the public interest or to the interest of consumer or consumers generally. WE, therefore, direct the respondent not to indulge in the aforesaid unfair trade practices and pass a "Cease & Desist Order" against the respondent. The respondent is directed to file its affidavit of compliance within 8 weeks from the date of this order. The applicant is entitled to relief since he has suffered pecuniary losses in the absence of possession of the flat in question even after making the full payment as a result of unfair trade practices indulged in by the respondent. Accordingly, we direct the respondent authority to pay the interest @ 18% p.a. on the various amounts deposited by the applicant from the date of deposit till the date of refund of the amount in question.

In the prayer clause of the compensation application, the applicant has sought compensation towards loss of money and mental agony to the tune of Rs. 3,00,000/-. We are not agreeable to award such huge compensation particularly when the interest at the rate of 18% is allowed from the dates of deposit. However, we are of the view that he is entitled to compensation towards harassment suffered to the tune of Rs. 10/000/-. The respondent is directed to pay the aforesaid amounts within 8 weeks from the date of this order and file an affidavit of compliance within 2 weeks thereafter which shall not be latter than 10 weeks from the date of this order. A copy of this order be sent to both the parties under R.P.A.D. Enquiry disposed of.