S.C. BITHAL vs DELHI DEVELOPMENT AUTHORITY

THIS is a compensation application preferred by Mr. S.C. Bithal (applicant hereafter) under Section 12B of the M.R.T.P. Act, 1969 alleging that the Delhi Development Authority (respondent hereafter) has indulged in certain unfair and restrictive trade practices visiting him with loss and damage. The averments of the applicant, in sum, are as follows:

THE applicant is an officer of the Punjab National Bank in Kapurthala Distt. of Punjab. THE Delhi Development Authority, the respondent introduced a "Sixth Self-Financing Housing Registration Scheme" in 1985, in terms of which it intended to construct and offer for allotment to the persons registered thereunder, semi-finished flats of different types, designs and plinth areas. This scheme was different from other schemes, in that, it offered semi-finished flats as against finished flats offered in the other schemes. THE respondent represented that the semi-finished flats would be constructed on muti- storeyed basis and would be expectedly ready within a period of two years. THE allottees were given the freedom to have furnishings, flooring, doors, shutters, grills and sanitary fittings of their choice and need. It was also represented that the semi-finished flats would cost approximately 30% less than the cost of the finished flats and that the first list of flats under the scheme would be released after the closure of registration on 24th July, 1985. Attracted by the above representations, the applicant applied for registration and deposited an amount of Rs. 15,000/- towards registration deposit. The respondent issued a receipt for the said payment on 24th July, 1985. The scheme remained only on paper and did not see ''the light of the day''. The applicant has alleged that the strategy of the respondent was to invite fresh applications from the persons registered under various schemes against the same registration deposit and was to change the basic character of its representations regarding the impugned scheme.

In February, 1991, long after the expiry of the 2 years period of the flats to be ready under the 1985 impugned scheme, the respondent issued an advertisement proclaiming the release of 3,000 flats "under various self-financing schemes by a fresh scheme". The eligibility under the fresh scheme was extended to persons registered under certain previous schemes including the impugned scheme. Though the 1985 impugned scheme was for semi-finished flats, the new scheme did not give any indication of the character of the flats implying thereby that the semi finished flats scheme was given a go-by without any information or notice to the registrants under the 1985 scheme including the applicant. However, the new scheme stipulated that registrants under the impugned scheme could be considered after meeting the requirements of registrants under some earlier scheme. This stipulated is "a substantial departure from the representation made in the 1985 scheme". This, therefore, constitutes an unfair trade practice under Section 36A of the Act.

THE next advertisement by the respondent related to a scheme of fully constructed houses for which applications were invited in October- November, 1991. Under this scheme also, the new stipulations as in the February, 1991 scheme were mentioned. No mention was made of the status of the semi-finished flats scheme even in this new scheme. There were 2 more schemes proclaimed by the respondent in December, 1992-January, 1993 and January, 1995, the new stipulations being some or similar to the February, 1991 scheme. An additional stipulation was that the registrants not availing of the new schemes would be deemed to have opted out of registration and would be entitled to refund of the registration amount. This implies that the impugned scheme for semi-finished flats had been abandoned. This again constitutes an unfair trade practice in terms of Section 36A of the Act.

DRAWING of lots for the purpose of allotment of flats is a game of chance constituting an unfair trade practice attracting Section 36A(3)(b) of the Act. In the light of manipulation of conditions of delivery of flats indulged in by the respondent. Section 2(o)(ii) of the Act has also been attracted. The applicant has sought compensation of the amount of Rs. 15,000/- paid by him as registration deposit along with interest. He has also sought compensation towards the cost of brochures, postage, travel, etc. of Rs. 25.000/- besides compensation towards difference in costs of similar flats prevailing in 1985 and 1995 of Rs. 6,00,000/- and a further compensation for mental anguish suffered by him of Rs. 2.00.000/-. The respondent submitted its detailed reply to the compensation application. Its averments briefly are: 1. The applicant neither opted out of the impugned scheme nor paid the demanded amounts. Not having mentioned this means that the applicant has not moved the Commission "with clean hands". 2. The applicant cannot take benefit of his own wrong and claim compensation. 3. The respondent is working on a "no profit no loss" basis and thus- the question of indulging in any unfair trade practice does not arise. 4. The respondent floats various schemes from time to time in order to "provide the ultimate allottee a choice of home in accordance with his taste". 5. No assurance was given to the applicant or the registrants that the flats under the impugned scheme would be constructed within 2 years. The time frame was only on expectation. 6 The registrants under the impugned scheme have been provided flats of their choice. If the applicant withdraws from the scheme, he will be entitled to the refund of Rs. 15,000/- towards the initial deposit along with interest at 7% per annum. 7. The main characteristics of the impugned scheme have not been changed. If a registrant wants to opt out of a scheme, he can always do so. 8. Whenever a new scheme is floated, the registrants are expected to go through the brochure before participating in the scheme. 9. A substantial number of registrants under the 1985 scheme have been allotted flats under some scheme or the other.

THE registrants under the 5th Self- Financing Scheme have priority over the registrants under the impugned scheme and this is the reason why the new schemes mentioned this.

THE methodology of drawing lots for allotment is not an unfair trade practice as this will ensure non- discrimination and equality among the applicants. The applicant opted for a flat in KondIi .Gharoli and was allotted a flat in March, 1995.

The applicant is not entitled to any compensation. 10. After the pleadings were completed, the following issues were framed: 1. Whether the respondent has indulged in the restrictive and unfair trade practice alleged in the compensation application ? 2. Whether the applicant has suffered any loss or damage as a consequence of the alleged unfair and restrictive trade practices ? 3. Relief. 11. The applicant furnished his affidavit by way of evidence along with the supporting documents. The respondent was set ex parte as its Advocate Mr. Sanjeev Gupta failed to put in his appearance at all the hearings after 22nd July, 1997. Arguments were heard ex parte on 10th February, 1998, after a notice was given to the respondent by Registered Post. Mr. S.S. Kumar, Advocate for the applicant advanced his arguments. 12. Even though the defence of the respondent was struck off on 6th August, 1997, when the respondent defaulted in its appearance at the hearing and also failed to pay the cost of Rs. l,000/- awarded earlier on 29th May, 1997, in the interest of justice, the reply of the respondent has been summarised earlier in this order and will also be discussed in the following paragraphs. This is merely to ensure that there is no miscarriage of justice because proceedings became ex parte against the respondent after a particular stage, during the tenure of this case. 13. It is obvious from the pleadings and from the evidence adduced by the applicant that the respondent having advertised and represented to the members of the public that the "Sixth Self-Financing Housing Registration Scheme" 1985 would provide semi-finished flats, reneged on the same and substituted new schemes abandoning the original scheme. The defence put up by the respondent that a large number of registrants under the 1985 impugned scheme had been allotted flats under some scheme or the other, is on excuse to justify the substitution of semi-finished flats with finished flats. Semi- finished flats have the characteristics of lending some freedom to the allottees to have their own choice of flooring, furnishings, sanitary fittings, shutters, etc. Such a freedom will not be available in fully finished flats. If an allottee like the applicant desired to avail the freedom, his/her desire has been stymied because of the respondent''s action of substituting the old scheme with a new one(s) with different characteristics. There is no worthwhile defence on the part of the respondent as to how this will not constitute an unfair trade practice. Not honouring its representation to construct semi-finished flats constitutes a serious deficiency in the conduct of the respondent. The respondent, therefore, has adopted an unfair method and falsely represented that the flats to be constructed would be of a particular standard, style or model and that its services would be of particular standard, quality or grade. This unfair trade practice attracts Sections 36A(1)(i) and (ii) of the Act.

IT is no argument on the part of the respondent to say that if the applicant withdraws from the scheme he can have the refund of the deposit. Regarding the charge relating to the methodology of the respondent of drawing lots to pick the successful allottees, it will not attract Section 36A(3)(b), as this does not involve promoting directly or indirectly the sale or use of the flats advertised by the respondent. It is merely a non-discriminatory method of selecting the allottees. This charges, therefore, fails.

HOWEVER, the unfair trade practice of false representation and the unfair method adopted by the respondent undoubtedly prejudice the interest of the applicant and similarly placed allottees and visit them with unjustified restrictions and costs. In this view of the matter, the trade practices indulged in by the respondent constitute restrictive trade practices of manipulation of conditions of delivery of service attracting Section 2(o)(ii) of the Act. The first issue is, therefore, decided in the affirmative against the respondent. The respondent has indulged in the aforesaid restrictive and unfair trade practices. The second issue is also answered in the affirmative as the applicant has suffered loss and damage, as a consequence of the aforesaid restrictive and unfair trade practices. Insofar as relief is concerned, the applicant is entitled to compensation of Rs. 15,000/- remitted by him to the respondent as registration deposit. He is also entitled to interest at 18% per annum on the said amount with effect from 24th July, 1985 upto the date of payment. He is also entitled to cost of Rs. 5,000/- incurred by him towards travel and litigation expenditure which will include the cost of Rs. 1,000/- imposed on the respondent on 29th May, 1997. I allow compensation of Rs. 5,000/- towards mental anguish under gone by him over the long period of more than 10 years. I am not inclined to grant compensation towards the difference in costs of similar flats prevailing in 1985 and 1995, as no evidence has been produced in support of such a claim and as interest at 18% per annum has been allowed on the principal amount. The respondent shall pay the aforesaid amounts within 6 weeks of the date of this order and furnish an affidavit in compliance within the same time frame. Application disposed of.