JUDGEMENT AGAINST GUJARAT HOUSING BOARD
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
FIRST APPEAL NO. 509 OF 2007
(Against the order dated 09.5.2007 in Complaint No.40 of 1998 of the State Commission, Gujarat)
1. “Jagrut Nagrik”
Through their Managing Trustee
Amin Building, 3rd Floor,
Gendigate Road, Vadodara
2. Gangaram J. Gorkha
3. Ravikrushna Suverna
4. Ashokbhai K. Rai
5. Kanaiyalal M. Rathod
6. Bhagwandas B. Panchal
7. Somabhai S. Patel
8. Gopalbhai N. Bhatt
9. C.V. Vergees
10. Chimanbhai D. Panchal
12. Murlidharan Pillai
13. Mohanbhai P. Ayanger
14. Sureshbhai J. Jumani
All Residing at Chitrakut Housing
Society, 232- MIG, Tarasali, Vadodara ……….Appellants
1. The Chairman
Gujarat Housing Board
Vijaynagar, Nr. Vadaj,
2. The Housing Commissioner
Gujarat Housing Board
Vijaynagar, Nr. Vadaj,
Ahmedabad- 13, (Gujarat)
3. The Executive Engineer
Gujarat Housing Board
Ellorapark, Vadodara-7, (Gujarat) ………Respondents
HON’BLE MR. JUSTICE V.B. GUPTA,
HON’BLE MR. VINAY KUMAR, MEMBER
For the Appellants : Mr. P.V. Moorjani, Authorized
Representative No.1 to 14
For the Respondents : Mr. R.P.Bhatt, Sr. Advocate with
Mr. S.K.Sharma, Advocate
PRONOUNCED ON: 09.03.2012
PER MR.VINAY KUMAR, MEMBER
This appeal arises from a complaint filed by Jagrut Nagrik a trust, through its Trustee and Secretary Shri P.V. Moorjani and 13 allottees of MIG flats
built by the Gujarat Housing Board in Tarasali, Vadodara. Deciding the complaint, the State Commission made the following order:-
“(1) The complaint is partly allowed.
(2) The opponents No.1, 2 and 3 are jointly and severally held responsible and are directed to pay Rs.2,500/- to each of the complainants No.2 to 14
towards compensation for the defective works stated in the complaint.
The opponents are also directed to pay Rs.2,000/- towards cost of the complaint No.1.”
2. This appeal has been filed by the Complainants seeking complete acceptance of their prayer before the State Commission, together with costs of
Rs.50,000/-. The order of the State Commission has not been appealed by the OPs/ respondents.
3. The case of the Complainants before the State Commission was that they had sought allotment of flats in response to an advertisement published by
Gujarat Housing Board (GHB) in newspapers in July, 1994. The estimated cost of each of these MIG flats measuring 49 sq. mrs. was indicated as
Rs.1,95,000/- It was subsequently enhanced to Rs.2,41,600/- in 1995 and finally to Rs.2,68,400/- in 1997. This enhancement has been termed as
‘arbitrary and broad daylight looting’ in the complaint petition. In support of their claim that this enhancement in price was also illogical, the
complaint petition states that while the eligibility under the advertisement of the respondent, GHB was limited to applicants in the annual income
bracket of Rs.31800 to Rs.53400/ (i.e. under Rs.4500 per month), the monthly hire purchase charge fixed by the GHB itself was as high as Rs.2980/-.
4. The second ground for filing the consumer complaint related to alleged defects in construction. According to the Complainants, as the respondents
did not agree to rectify the defects, complainants themselves appointed a Consulting Engineer, one Mr. A.J.Vyas to make an assessment. This consultant
assessed that each of these 13 flats would require Rs.18,000/- to carry out the work of rectification.
5. In the affidavit evidence of the Complainants before the State Commission, it is also alleged that it was not open to the OPs/respondents to
unilaterally modify either the extent of the built up area or the price from what was given in their advertisement. In their view the fact of
Complainants having accepted possession of the flats is not evidence in itself that they had accepted the enhancement in price or were satisfied with
the quality of construction.
6. Contrary to the above stand of the Complainants, the response of the respondents/ Gujarat Housing Board before the State Commission was that the
advertisement relied upon by the Complainants was brought out as ‘demand survey’ to ascertain the necessity of providing such dwelling units in
Tarsali, area of Vadodara. It was clearly mentioned therein that price and built up area shown were only approximate. Therefore, as per the written
submission of the OPs, there cannot be any grievance against modification of price or built up area. It was open to the applicants (Complainants) to
accept or not to accept the variation. After accepting the variation and entering into agreement for sale with the Gujarat Housing Board, as well as
taking possession of the respective flats, it was not open to them to make complaints about the modification of price or area.
7. As for the complaint about defects in constructions, the case of the respondents/Gujarat Housing Board before the State Commission was that:-
a. possession of the dwelling units was handed over to the Complainants after proper scrutiny of the constructions by them. Possession receipts signed
by them mean that they were duly satisfied.
b. the Consulting Engineer appointed by the Complainants is not recognized by or registered with the GHB and therefore his report cannot be accepted.
8. We have heard at length Shri P.V. Moorjani on behalf of all the Complainants and Mr. R.P.Bhatt, Senior Advocate on behalf of the respondents/GHB. We
have also perused the record and considered the decisions of the Apex Court as well as of this Commission cited by the two sides.
9. It was argued on behalf of the appellants that even if the price indicated in the advertisement was indicative or tentative, its modification could
not be arbitrary. Enhancement on account of increase in the area from 49 sq. mts. to 52 sq. mts. and on account of increase in the land acquisition
compensation subsequent to the advertisement would be acceptable, as per the appellants. However, these two factors cannot, it is alleged, explain the
steep increase from Rs.1,95,000/- to Rs.2,68,400/- per flat. On behalf of the respondent/GHB a reference was made to the testimony of Shri Anil Bhai
Bhagwan Bhai Patel, Executive Engineer and Estate Manager, before the State Commission on 16.2.2004. From his testimony it is found that the
construction of these houses was commenced on 18.3.1995 and was completed on 17.9.1996. While escalation in the price of construction material was to
the account of the contractor, prices were revised afterwards due to the following reasons:-
“(1) Tenders were high priced
(2) Additional prices were demanded in pending land cases.
(3) Area of Construction increased while approving the plan
(4) Additional construction of otta and under ground tank was decided.
(5) There was a rise in development charges and service charges of Corporation.
(6) Cost of Materials increased at every stage.”
This shows that revision in the cost of flats was not arbitrary, as is made out by the appellants. However, determination of the extent to which these
factors would have justified the increase, would take the matter into the realm of price fixation.
10. Learned counsel for the respondent/GHB drew our attention to the decision of Hon’ble Supreme Court of India in Tamil Nadu Housing Board and others
Vs. Sea Shore Apartments Owners Welfare Association, 2008 CTJ 119 (SC) (CP), in which the issue of price fixation, through proceedings under the
Consumer Protection Act, 1986, came up for a detailed consideration. The matter pertained to construction and allotment of flats by the Tamil Nadu
Housing Board (TNHB). At the time of allotment in 1994, the allottees were informed under an agreement with the TNHB that the total costs of the flat
was subject to modification on account of increase in land acquisition costs. At the time of giving possession the allottees were asked to pay
additional cost. The Sea Shore Apartments Owners Welfare Association represented against this increase to the TNHB, but to no avail. The escalation was
therefore, challenged before the Tamil Nadu Consumer Disputes Redressal Commission, in a consumer disputes under Section 12 of the Consumer Protection
11. The State Commission held it to be a deficiency in service and allowed the complaint. The National Commission dismissed the appeal of TNHB
observing, “not a scrap of paper has been filed by the opposite party to show that there was any land acquisition proceedings before any court in
respect of the land in question.” The Supreme Court held that the intended purchasers were aware that the final price was to be fixed by the Board.
12. Responding to the contention of the TNHB that fixation of price of flats cannot fall within the purview of the State Commission and the National
Commission, the court observed that price fixation depends upon several factors. ‘Normally, therefore, it would not be appropriate to enter into
adequacy of price.’ Experts alone can work out the mechanics of price determination. A court can certainly not be expected to decide it without the
assistance of experts. Allowing the appeal of the TNHB, the Apex Court observed–
“In our considered opinion, the State Commission as well as National Commission ought to have considered all these aspects. Even if they were of the
view that after the amendment of the Act in 1993 and in the light of inclusion of ‘housing construction’ within the meaning of ‘service’ in clause (o)
of Section 2(1), the Commission had jurisdiction to deal with and decide disputes relating to deficiency in service under the Act which included the
issues raised, it was obligatory on them to consider whether the controversy raised in the proceedings with regard to fixation of price would be
justiciable on the facts and in the circumstances of the case, particularly in the light of the contentions raised by the Board that there was increase
in plinth area, ground area and payment of enhanced compensation to land owners. They were also required to consider that the Board does not have land
of its own and the land was acquired under the Land Acquisition Act by paying compensation as determined in accordance with the provisions of that law.
The Commissions also could not ignore the fact that when the advertisement was issued for the purpose of registration of intending purchasers of flats,
they were clearly intimated that the price shown was merely a ‘tentative price’. Again, when the scheme was altered the intending purchasers were
informed that the price was tentative and they would have to pay price finally determined by the Board. They consented and entered into an agreement by
giving an undertaking that they would pay the price determined by the Board. When the question of giving possession of flats came up, the Board
informed them to pay the remaining amount so that possession could be delivered to them. They made such payment and obtained possession. It was,
therefore, contended by the Board that the allottees were estopped from raising the contention that additional amount could not have been recovered
from them. It was open to the allottees not to pay the additional amount demanded by the Board and not to take possession. By agreeing to pay the
amount and by paying such amount and taking possession, now they want to go behind the concluded contract between the parties. In our considered
opinion, all these questions were required to be gone into by the State Commission as also by the National Commission. The orders passed by both the
fora are, therefore, liable to be set aside.”
13. We therefore feel that in the above background, the State Commission was right when it declined to go into the justification for enhancement of
price by the respondent/GHB.
14. Coming to the question of defects in construction, our attention was drawn to the following comment of the State Commission at page 17 of the
“The opponent has failed to prove their case by documentary evidence or expert opinion that there is no defect in the construction or sub standard
materials were used. Further at the time of arguments learned advocate of the opponent had fairly given consent that for any defect the opponent will
carry out the repairing work or alternatively if the complainants submit details of the bill for the repairing work the opponent will reimburse the
amount/repairing costs. We have suo moto asked the complainant No.1 to produce the details about the bills paid in connection with the repairing works.
However, they failed to submit the same.”
15. In this context, it needs to be observed that the report of the Consulting Engineer A.J. Vyas was considered by the State Commission. OP/GHB had an
opportunity to examine and challenge its findings before the State Commission. Instead of doing that, the OP chose to reject the findings completely by
a sweeping objection in their written response before of the State Commission that the Consulting Engineer was neither recognized by nor registered
with the Gujarat Housing Board and therefore his report was not acceptable. Having thus, totally rejected the report, it is not open to the
respondent/GHB now to contend in appeal that Mr. Vyas had not taken samples to prove defects and use of sub standard material in the construction. We
therefore, agree with the finding of the State Commission that GHB has failed to prove that there was no defect in the construction.
16. The State Commission has awarded compensation to individual allottees (Complainants No.2 to 14). In our opinion the amount awarded is
disproportionately low in comparison with the nature of defects pointed out in the individual dwelling units. Although, individual bills for repair
were not produced before the State Commission, we consider it just and proper to enhance the compensation amount from Rs.2500/- to Rs.5000/- in each
case. In addition, respondent/GHB is also directed to rectify the defects listed in points (i), (j) and (k) at page 7 of the impugned order. These
defects pertain to the layout per se and are not part of the individual dwelling units. These rectifications, relating to roads, ground levels, street
lighting and parking, shall be done by the GHB at its own cost and shall be completed within a period of three months from the date of this order. The
appeal is disposed off in the aforesaid terms. There are no orders as to costs.