MAJOR LOKNATH JAGGI (RETD.) vs CHAIRMAN/CHIEF EXECUTIVE OFFICER, BHOPAL DEVELOPMENT AUTHORITY

THIS is an appeal against order dated 9.1.1996 passed by the District Consumer Disputes Redressal Forum, Bhopal in their Case No. 133/95, wherein the Forum has directed the opposite party to pay to the complainant/appellant amount received as interest Rs. 6,313/-, compensation Rs. 3.000/- and costs of the proceedings Rs. 500/- and also to carry out repairs to the satisfaction of the complainant as desired by the letter dated 24.7.1994. In respect of the escalation of price, the Forum has directed the complainant to agitate the matter in Civil Court stating that the Forum has no jurisdiction to try the said matter.

THE appellant has come up in appeal against this order of the Forum wherein the Forum has not accepted the request of the complainant to order refund of escalated price alongwith interest. THE appellant has requested for further reliefs as under : (i) Refund of escalated price of Rs. 47,700/- with interest @ 18% w.e.f. 23.7.1994. (ii) Payment of additional expenditure incurred by him on account of registration due to inflated cost Rs. 6,396/- alongwith interest @ 18% w.e.f. 8.12.1994. (iii) Payment of compensation for palming off incomplete flat -18% interest on Rs. 4,34,104/- w.e.f. 23.2.1995. (iv) Cost of this appeal.

A fortnight''s delay in submitting the appeal is condoned for satisfactory reasons explained by appellant. The opposite party also did not object to the condonation of delay.

Heard the arguments of both the parties and perused the records of the case.

THE undisputed facts of the case are as under: (i) That the respondent Bhopal Development Authority had got an advertisement published in local newspapers; inviting applications alongwith registration fee of Rs. 50,000/- for allotment of HIG-B Hat in Kohe Fiza, Bhopal costing approximately Rs. 3,35,000/-. THE applications were to be presented between 20.7.1993 to 19.8.1993. According to the advertisement, the balance of the amount was to be deposited in four equal instalments in 450 days. (ii) That complainant (Baratilal) submitted his application alongwith registration fee of Rs. 50,000/- payable by DD No. 3517614 dated 18.8.1993 of Dena Bank. (iii) That the respondent Bhopal Development Authority issued a letter No. 5874/Rev/93 dated 20.9.1993 to Shri Baratilal stating that HIG-B flat in Kohe-Fiza scheme costing approximately Rs. 3,35,000/- is allotted to him. THE letter further stated that the balance amount of Rs. 2/85/000/- has to be paid by him in two instalments - first instalment of Rs. 1,42,500/- within 30 days from the date of allotment and second instalment of Rs. 1,42,500/- fifteen days before taking possession of the flat. In para 7 of the letter it was stated that in case of non-payment of amounts on due dates allotment will be cancelled and registration amount shall be forfeited. And in para 3 it was stated that the cost of the flat was approximate and the allottee will have to pay the difference in cost, on intimation of actual cost, before taking possession of the flat. (iv) That on objection by the complainant, that according to advertisement, the amount was to be deposited in four equal instalments in 450 days and not immediately in two instalments, the respondent Bhopal Development Authority in their reply No. 6653 dated 28.10.1993 stated that the directions to pay in four equal instalments in 450 days as stated in advertisement in "Dainik Bhaskar" dated 18.7.1993 was ''by mistake'', whereas the flat has already been constructed. (v) In para 9 also of their reply dated 20.7.1995, submitted by respondent Bhopal Development Authority before the District Forum, the Bhopal Development Authority has stated categorically that the condition of payment in 450 days as given in the advertisement was applicable only in case of flats "under construction" and not in case of flats "already constructed" fully i.e., the flat under dispute had already been constructed before the date of advertisement i.e. 18.7.1993 the date of publication of advertisement in "Dainik Bhaskar". (vi) That vide Letter No. 6454 dated 20.10.1993 the respondent BDA directed appellant/complainant to pay escalated cost of Rs. 47,700/- in addition to earlier declared approximate cost Rs. 3,35,000/-. (vii) That in respect of this escalated cost the Distt. Forum has in para 10 of its order stated as under : THE opposite party has claimed escalation of price by Rs. 47,700/- by letter dated 20.10.1993. Within a period of hardly one month of issue of the allotment order the estimated price exceeded by Rs. 47,700/- is a fact which comes to us as a surprise but we are helpless in this matter for the reason that relief in respect of escalation of price cannot be granted by this Forum in view of III (1993) CPJ 404 (NC), Joginder Bedi v. Delhi Development Authority, decided by National Commission that charging of escalation price doesn''t fall within the definition of the word "deficiency in service".

We are in full agreement with the District Forum that it has been the consistent view of Hon''ble National Commission that the question of pricing of a flat or plot cannot form the subject matter of a "Consumer Dispute" and charging of escalated price does not fall within the definition of "deficiency". The Hon''ble National Commission in their recent order dated 6.5.1996 (1986-1996 Part-II National Commission & Supreme Court on Consumer Cases-2187 (NS) have reiterated that "the question as to what was estimated cost and what was the actual cost of the flat is a matter of pricing not amenable to the jurisdiction under the Consumer Protection Act".

BUT the facts and circumstances of this case are totally different. There is no question of estimated price or so-called escalation. The price Rs. 3,35,000/- was quoted for a flat which had "already been constructed" and not for in flat "under construction". Fact of completion of construction of the flat has been admitted by BDA in paras 7 and 9 of their reply before Forum and also in BDA''s letter No. 6653 dated 28.10.1993 sent to Shri Baratilal. In the advertisement dated 18.7.1993, the price quoted was Rs. 3.35.000/- and in the allotment order also issued on 20.9.1993, the price payable for constructed flat was quoted as Rs. 3,35,000/-. But within month, suddenly on 20.10.1993, a letter was issued that there has been an escalation of price by Rs. 47,700/-. "To escalate" means "to increase or develop (us: rapidly") by stages from original position. Escalation of cost means escalation from the original cost quoted. Cost of cons truction does escalate from "estimated cost" or "quoted cost" during the course of construction, but question of escalation would not arise if and when there is no activity of construction. In case of flat, of which construction is already over, on the date of quoting its cost price, question of escalation subsequently does not arise at all. Similar logic is applicable in case of area of the flat. Area may increase of that flat only, which is still under construction and not, that of which, has been constructed. The drawing must have been prepared before construction and construction must have been done as per drawing.The BDA must have known the exact area, at least after completion of construction and similarly the exact estimate before construction and also the exact cost incurred after completion of construction. As such actual area of the flat and actual total cost of the construction as incurred, was very much in the knowledge of the BDA, at the time of advertisement. BDA has absolutely no justification to say that they did not know exact area of the plot and exact cost of construction on or before 20.9.1993. At least, question of any escalation within a month does not arise and the so-called ''escalation'' is mis- nomer.

THUS the BDA not only enhanced the cost arbitrarily but also recovered forcefully the amount of Rs. 47,700/- by threat of cancellation of the allotment and forfeiture of registration amount, if the said amount was not paid within stipulated period.

BESIDES this, BDA has categorically admitted in their reply No. 6653 dated 28.10.1993 that the direction to pay in four instalments in ''450 days was "by mistake". Thus in the advertisement, this flat was wrongly shown as requiring 450 days for completion of construction. And if this was really "a mistake" why was this mistake not rectified by subsequent amendment for even two months or even thereafter. Even if it is presumed, that there was no mala fide intention or adverse motive, the advertisement did mislead the public at large and applicants with meagre resources were allured by the advertisement because 70% of the cost was to be paid in instalments in more than one and a half years'' time and presently only booking amount of Rs. 50.000/- was to be paid. The applicants were never made aware of this fact even upto the last date of receipt of applications, that the balance of the amount i.e., major portion was to be paid immediately and not in four instalments in 450 days. It is akin to unfair trade practice.

Publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at bargain price of goods or services that are not intended to be offered for sale or supply at bargain price is "Unfair Trade Practice" according to Section 2(r)(i) of the Consumer Protection Act. For the purpose of Clause (2), "bargaining price" means also a price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold. Thus an advertisement which makes no specific claim to be offering a reduced or bargain price may yet be caught if the price stated is one which a member of the public could reasonably understand to be a bargain price because it is lower than price normally charged for similar goods or service.

THE very fact that within exactly a month of the date of allotment order the BDA directed the appellant to pay in addition, escalated cost Rs. 47.700/- and continuously insisted on payment with threats that if the payment was not made within period specified, allotment order would be cancelled and registration amount shall be forfeited, establishes the intention of the respondent at the time of advertising that it was not intended to offer the flat at the price advertised. This amounts to unfair trade practice. Under the circumstances stated above this additional amount of Rs. 47,700/- asked for, does not come in the category of escalated cost. Nor is there any justification for enhancing the cost within a month from the date of allotment and the BDA has been blatantly deficient in performance of their services and unjustly collected this amount from the appellant and hence this amount deserves to be refunded, alongwith interest.

DURING the pendency of the proceedings the appellant/complainant complained that the respondent BDA has not done any repairs in pursuance of the order of the District Forum. On this, the BDA undertook to carry out the repairs within a fortnight. But when even after two months, the BDA was reported to have not done any substantial repairs as expected, at the request of the appellant and with the consent of the respondent. Shri P.C. Jain, Retd. Chief Engineer, P.W.D. was appointed as Commissioner to inspect and submit a report regarding the repairs required to be done and also for estimating the cost of repair. On receipt of the report of the Commissioner, copy of the same was delivered to respondent BDA to file their submissions. Simultaneously, alongwith receipt of their written submissions by the respondent, the arguments of both the parties were heard and the case was closed for orders. In their written submissions on Commissioner''s report, the BDA just put for the objections of such technical nature relating to construction which are not of much avail unless rebutted by counter report by equally qualified engineer or by cross-examination of the Commissioner. The Commissioner is a Retd. Chief Engineer, P.W.D. who has also worked on deputation as Chief Engineer of BDA also, only a few years back, and we find no reason to disapprove his report. " The Commissioner has enclosed a statement showing quantum of work to be done and has evaluated the same by adopting the rates from schedule of rates as is prevalent in Bhopal at present in P.W.D. and according to him Rs. 33,393/- will be required for bringing the flat to the desired level of construction. Since the BDA has not challenged this evaluation of Rs. 33,393/-, we accept the Commissioner''s report as it is, in respect of evaluation of repairs to be done.

IN the light of the above discussions, this appeal is allowed and following additional reliefs are ordered to be granted to the appellant: (i) That the respondent (Bhopal Development Authority) shall refund to the appellant, the escalated cost Rs. 47,700/- alongwith interest at the rate of 18% w.e.f. 23.7.1994 till the date of payment. (ii) That the respondent (Bhopal Development Authority) shall pay within two months to the appellant Rs. 33,393/- as charges for repairs required to be done and failing compliance within stipulated period to pay interest in addition @ 18% on this amount of Rs. 33,393/- till payment.. (iii) That the respondent (BDA) shall reimburse to the respondent registration charges amounting to Rs. 6,396/- alongwith interest at the rate of 18% w.e.f. 8.12.1994 till payment.

THE reappears to be no reason to enhance the amount of compensation as awarded by the District Forum in view of reliefs ordered as above. THE parties shall bear their own cost. As regards the remuneration of the Commissioner Shri P.C. Jain, Retired Engineer in Chief, P.W.D. for his inspection and report submitted to this Commission, it is fixed as Rs. 4,000/- which shall be paid by both the parties in equal share of Rs. 2,000/- each by depositing the amount in the Registry within a fortnight from the date of receipt of this order. THE appeal is disposed of accordingly. Appeal disposed of. ______________