PRADEEP THUKRAL vs AAR PEE APARTMENTS PVT. LTD.

SHRI Pradeep Thukral (applicant hereafter) has moved this Commission with an application under Section 12B of the MRTPC Act, 1969 claiming compensation against Aar Pee Apartments Pvt. Ltd. (respondent hereafter) having suffered loss and damage on account of certain restrictive and unfair trade practices on the part of the respondent.

THE applicant booked a shop space with an area of 97 sq. ft. for a price of Rs. 82,540/- in the Janakpuri Tower Local Shopping Centre, Janakpuri, New Delhi with the respondent. THE price agreed was at Rs. 850/- per sq. ft. THE initial deposit of Rs. 11,750/- was paid by the applicant on 24th July, 1987 at the time to booking with the balance amount being payable at the various stages of construction in terms of a schedule prescribed by the respondent. THE applicant was allotted a shop bearing number G-3, B-4/A1 with the understanding that the construction would be completed by 1989. According to the applicant, he paid the instalments from time to time, on receiving demand notices from the respondent though the notices were sent, not in accordance with the time schedule prescribed by the respondent. Very often, the demand letter was of a very short notice, placing a great strain on the applicant as he had to borrow from outside sources at high interest rates. There was always a threat of cancellation in the event of delaying the payment. The respondent however never complied with the time schedule for construction of the shop. The applicant paid 95% of the total price of the shop but possession of the shop was never handed over to him. On 26th December, 1992, he received a demand notice for an amount of Rs. 33,658/-. The applicant states that this demand was totally unjustified and contrary to the agreement and the price. The respondent had demanded the extra amount on the ground of escalation of the cost of the cement and the extra height of the shop under construction. When the applicant inspected the shop he was shocked to find that the area of the shop allotted was only 50% of the originally agreed 97 sq. ft. Even though the agreement provided that the area constituted the super area, it was shocking to the applicant that the common facilities space reduction was about 50% of the super area.

Upon this, the applicant informed the respondent that the demand for the further amount was illegal and in violation of the booking agreement, that the delay on the part of the respondent in constructing the shop was squarely the fault of the respondent and that he could not be called upon to compensate the escalation in cost of cement etc. The respondent however, in its reply, justified the demand of the further amount.

THE applicant has alleged that the respondent has indulged in the restrictive and unfair trade practices by delaying the construction of the shop by having the shop space at 50% of the originally agreed area at the time of booking and by demanding further amounts which are totally unjustified and unwarranted. THE action of the respondent attracts Section 36A of the Act constituting unfair trade practices and Section 2(o) of the Act constituting restrictive trade practices. He has prayed for compensation of an amount of Rs. 74,411/- deposited by him alongwith interest. He has also claimed damages to the tune of Rs. 75,000/- for harassment and mental agony suffered by him. The respondent furnished a detailed reply to the compensation application, a summary of which is as follows : Preliminary objections 1. An application for compensation lies only if some unfair or restrictive trade practice has been indulged in by the respondent but there has been no enquiry in regard to any alleged prohibited trade practice. 2. The application is an "abuse of the process of law" as the applicant failed to take possession of the shop in question and failed to pay the amounts due as demanded by the respondent. The applicant did not make payments as per the agreed schedule of payment. He defaulted in payment of the "allied charges" of Rs. 33,658.74, in 1991. 3. If there was any dispute between the parties in terms of Clause 45 of the agreement between them, it should have been referred to an Arbitrator. Reply on Merit 4. The applicant has been irregular in making payments as per the agreed terms. He was also required to pay "allied charges" which he has not paid even till today. Even though the shop was ready and the applicant was offered possession he could not be given possession because of non- payment of dues on his part. 5. In terms of Clause 8(g) of the application for registration, the applicant has agreed to the terms and conditions and agreed to sign the agreement in the standard form. Clause 2(c) of the agreement stipulates that if there is escalation in the cost of cement and steel, the price of the shop will be increased proportionately. 6. In terms of Clause 8(e) of the application for registration, the "allied charges" which include electric connection charges, ground/ vacant land tax, house tax, property tax and other charges have to be paid by the applicant.

THE area booked constitutes the super area and this expression has been defined in Clause 8(a) of the application for registration. Having signed the application for registration, the applicant cannot question its validity. The applicant has breached the agreed terms and refused to clear his dues and take possession. There is, therefore, no question of compensating him by the respondent. 8. After the pleadings were completed, the following issues were framed : 1. Whether the application is not maintainable for the reasons mentioned by the respondent in its reply by way of preliminary objections ? 2. Whether the respondent has indulged in the unfair/restrictive trade practices alleged in the compensation application ? 3. Whether the applicant has suffered any loss or injury on account of the alleged unfair/restrictive trade practices ? 4. Relief.

The applicant furnished his own affidavit by way of evidence alongwith the supporting documents. He was cross-examined by Mr. M.L. Sachdev, Advocate for the respondent. The respondent furnished his evidence in the form of an affidavit of Shri D.R. Lall, its Manager alongwith supporting documents. He was cross- examined by Mr. G. Umapathy, Advocate for the applicant.

I have given a hearing to Mr. M.L. Sachdev, Advocate for the respondent. Mr. G. Umapathy, Advocate for the applicant submitted his written submissions. Mr. P.K. Aggarwal, Advocate for the respondent who assisted Mr. Sachdev also furnished his written submissions.

THE first issued need not detain us as there is no force in the contentions of the respondent by way of preliminary objections in its reply. Firstly, there is no need to have an enquiry leading to a "cease and desist" order under Section 36D(1) or Section 37(1) of the Act in respect of unfair and restrictive trade practices respectively. The compensation application can stand on its own leg and this is the settled legal position laid down by the Commission in the Saligram v. Remal Public School case. (C.A. No. 1317 of 1988 dated 28.11.1989).

Secondly, the argument that in terms of Clause 45 of the agreement between the applicant and the respondent, disputes between them will have to be carried in arbitration also has no force, as it has been established as will be seen later that the so called agreement was not signed by the applicant. The standard agreement was furnished by the respondent alongwith its reply but it has not been proved by the respondent that the said standard agreement was signed by the applicant.

THIRDLY, the other contentions of the respondent that the application is an "abuse of the process of law" and that there is a breach of agreement on the part of the applicant are not sufficient grounds for challenging the maintainability of the application. They do not constitute legal submissions as the said contentions are related to facts which need to be proved only in evidence. These contentions are discussed in the following paragraphs dealing with the facts of the case. The first issue is therefore decided in the negative against the respondent. The application is maintainable. The second issue is whether the respondent has indulged in the alleged unfair and restrictive trade practices. The dispute is essentially on four aspects. The first relates to the delay in the construction of the shop and consequently the delay in offering of its possession to the applicant by the respondent. The second relates to the escalation in the cost due to increase in the price of cement and steel and the non payment of the same by the applicant to the respondent as per agreed terms. The third relates to certain demand of payments beyond what was agreed to, including the demand of the so called "allied charges". The fourth relates to the carpet area of the shop.

NOW the first aspect. Insofar as delay in construction is concerned, I note that there is no categorical commitment on the part of the respondent that construction of the shop would be completed in 1989 as alleged. The application for registration (Ex. AW 1 /2) was signed by the applicant. There was no other agreement which was signed by the applicant. In terms of the said exhibit, there is no mention of time frame for construction. The alleged representation by the respondent to the applicant that possession of the shop would be given in 1989 is not a part of the said exhibit and thus the charge is not established. Even on a perusal of the schedule of payments, the different instalments are predicated on certain events like completion of excavation, the first floor roof slab etc. But there is no time frame. There was a contention on the part of the respondent that because of the standard agreement, the applicant is tied to the stipulations therein. In fact the Advocate for the respondent brought to my notice certain judgments relating to the binding nature of contracts and agreements. But they do not warrant mention in the order, as there is no signed standard agreement between two parties. The applicant has merely signed the application for registration. Shri D.R. Lall, Manager of the respondent during his cross-examination categorically stated that the standard agreement was not signed by the applicant at the time of making the application. It is, therefore, totally unjust to bind the applicant to the stipulation in the standard agreement which he never signed. In view of this, none of the citations of the Advocate for the respondent needs to be mentioned or discussed. The applicant was never a party to the standard agreement. In fact, as discussed on the maintainability issue (Issue No. 1) Clause 45 of the said agreement. relating to the arbitration clause, has no application in this case. A weak argument has been advanced by the respondent that in terms of Clause 8(g) of the application for registration which the applicant had signed, he was bound to sign the standard agreement. In this view, the respondent has argued that the standard agreement is binding on the applicant. I am afraid, I cannot accept this contention. It is one thing to agree to sign the agreement and it is another to actually sign the agreement. Inasmuch as the standard agreement was not signed by the applicant, none of the stipulations therein is binding on the applicant.

THE second aspect. THE respondent has leaned on the stipulation in the standard agreement, namely Clause 2(c) that in case the price of cement and steel rises, the price of the shop will be increased proportionately. THE same argument as in the foregoing paragraphs will hold good that inasmuch as the standard agreement was not signed by the applicant, the clause referred to namely Clause 2(c) cannot be binding on the applicant. THE respondent cannot increase the price of the shop relying on Clause 2(c) of the standard agreement which was never signed by the applicant.

THE third aspect. THE respondent is entitled to charge the so called "allied charges". Clause 8(e) of the application for registration which the applicant has signed stipulates that electric connection charges, ground/vacant land tax, house tax and property tax and other "allied charges" would have to be borne by the applicant. THE "allied charges" can be charged by the respondent and the applicant cannot have any objection to the same. The fourth aspect. This relates to the contention voiced by the applicant which requires discussion. The super area agreed upon is 97 sq. ft. In Clause 8(a) of the application for registration which the applicant has signed, the super area has been defined to include covered area and the proportionate share of the area under common facilities like staircase, lifts, balconies etc. But here, the grievance of the applicant is that the ultimate space he has been offered is a moiety of the super area. The Commission has in the case Shri Yash Nidhi Mehta v. Jaina Properties Pvt. Ltd., RTPE No. 400/88 and C.A. No. 2215/88 dated 19.5.1993 reported in 1993 (1) CTJ 302 MRTPC, has laid down the stipulation that the super area should not be more than one third of the covered area. In this case, the actual area given is about 50% of the super area and thus trenches the ratio laid down by the Commission in the Yash Nidhi Mehta case (supra). In view of this, there is a clear case of unfair and restrictive trade practices on the part of the respondent.

In view of the action of the respondent in : 1. Charging extra price for steel and cement, and 2. Having offered possession of the shop having a carpet area which is nearly 50% of the total super area, it has indulged in unfair trade practices under Section 36A of the MRTP Act and restrictive trade practices of manipulations of conditions of delivery of services attracting Section 2(o)(ii) of the Act.

The argument of the respondent that the possession of the shop could not be given because of non-payment of dues by the applicant has no nexus with the aforesaid unfair and restrictive trade practices which stand established. The charging of extra price for cement and steel and offering the shop of a carpet area which is about 50% of the super area have no connection whatsoever with the alleged non-payment of dues by the applicant.

ONE more weak argument put forth by the respondent is that the applicant should have moved the Commission in 1989 itself, if he was aggrieved by the delay in the construction of the shop. It was argued that the Limitation Act will come in the way of the application being entertained by the Commission. What is fallacious in this argument is that limitation cannot come into play for the reason that the unfair and restrictive trade practices alleged which have been established above are continuing. The demand notice was served by the respondent relating to the "allied charges" only on 26th December, 1992. After that, there was correspondence between the parties ultimately leading to the compensation application being filed by the applicant in August, 1994. The Limitation Act will not come in the way at all. The Advocate for the respondent after the hearing had concluded submitted an application for placing on record a certificate of an Architect with calculations and floor plan and also a copy of the standard agreement, even though in terms of the legal procedure no documents can be taken on record after the hearing had concluded. Even for argument stake, if the said documents are taken into consideration, it may be seen that the standard agreement has already been referred to in the discussion above and discarded, as it was not signed by the applicant. Insofar as the Architect''s certificate is concerned, it only confirms that the actual carpet area of the shop is about 50% of the super area. This fact has already been reckoned in the discussion above. Thus even if the two documents were to be taken into consideration, there is no change in the ultimate decision.

IN view of the foregoing discussion, the second issue is decided in the affirmative against the respondent. The applicant having suffered loss and injury on account of the unfair and restrictive trade practices mentioned above, is entitled to compensation. The respondent itself has admitted in its letter dated 26th December, 1992 (Ex. AW 1 /3 collectively) that the applicant has paid a total amount of Rs. 74,411.60. The respondent shall pay the aforesaid amount alongwith interest @ 18% per annum with effect from 1.3.1991 (the last of the payments made by the applicant was on 28.2.1991) till the date of payment. As interest is being paid @ 18% per annum there is no need to compensate the applicant for the mental agony suffered by him for which he has claimed compensation. The applicant is however entitled to cost of Rs. 5,000/-. The respondent shall pay the aforesaid amounts within six weeks from the date of this order and furnish an affidavit in compliance within the same time frame. Application disposed of. ______________