CONSUMER COMPLAINT NO.206/1996 Date of filing : 1996

Date of order : 20/04/2009

Oshiwara Akash Ganga Co-op.Hsg.Society

(On behalf of its members through

Chairman Shri Y.E.Rassiwala)

HIG Building no.1, Oshiwara New Link Road

Jogeshwari (W), Mumbai 400 102 ………...Complainant


1. Estate Manager

Bombay Housing & Area Development Authority

Griha Nirman Bhavan, Bandra(E)

Mumbai 400 051

2. Chief Executive officer

Bombay Housing & Area Development Authority

Griha Nirman Bhavan, Bandra(E)

Mumbai 400 051 ……….Opposite parties

Corum: Justice Shri B.B.Vagyani, Hon’ble President

Shri P.N.Kashalkar, Hon’ble Judicial Member

Smt.S.P.Lale-Hon’ble Member

Present : Mr.Shirish Deshpande-Advocate for the complainant.

Mr.U.P.Warunjikar-Advocate for the O.Ps.


Per Justice Shri B.B.Vagyani, Hon’ble President

1. Heard Mr.Shirish Deshpande-Advocate for the complainant. Mr.U.P.Warunjikar-Advocate for the O.Ps.

2. In brief facts of the case are as under:-

Bombay Housing & Area Development Authority announced housing scheme for the people of the High Income Group on outright purchase basis somewhere in the beginning of August 1985. There were two schemes. One scheme was known as Code no.65 in which area of the flat was 642.08 sq.ft. Another scheme was known as Code no.66 in which flat admeasured 609.69 sq.ft. Both the schemes were at Oshiwara, Jogeshwari. For code no.65 tentative estimated price of flat was Rs.2,43,500/-. Expected date of completion was December 1987. Tentative price of the flat in Code no.66 was Rs.2,31,000/-. Expected date of completion was October 1986. Flats were to be allotted by lottery. The members shown in the list Exhibit B are successful candidates in the lottery drawn by O.Ps and were allotted the flats under Code no.66 in the month of April and May 1989 as against promised date of possession being October 1986. At the time of delivery of possession of flats, the O.Ps revised total cost of the flat to Rs.2,52,826/- and in some cases Rs.2,60,800/- and thus collected difference between original estimated price and revised price amounting to Rs.21,826/- and in some cases Rs.29,800/-. Even after having delivered the possession of flats to the successful applicants in May 1989, O.Ps declared that revised price was not the final price. The O.Ps again revised the final price to the tune of Rs.2,58,100/-. O.Ps issued letter on 26/2/1993 and asked the complainant society to pay the shortfall.

3. The complainant society has a serious grievance about the delay in handing over possession of the flats and delay in fixing the price. The complainant society has serious grievance about the maintenance of the flats and the building. The O.Ps failed to pay electricity charges for the building despite collecting the electricity charges from the members. The complainant society has also made grievance about sub standard quality of construction. The society has also made grievance that the members are required to pay municipal taxes on higher rate on account of delay in completion of the project. Therefore the complainant society filed consumer complaint before the State Commission.

4. O.Ps filed written statement and opposed the consumer complaint. In brochure itself it was made clear that the price quoted in the brochure was a tentative price. It is further contended by the O.Ps that the O.Ps have power to frame regulations. Because of fluctuations in price of building materials, the tentative price was quoted in the brochure. It is further contended that because of critical process, final price was not fixed for which O.Ps cannot be blamed and punished. It is also contended by the O.Ps that the Contractor to whom the project was entrusted could not complete the project because of non supply of building material in time. Some of the causes were beyond his capacity. Causes were found genuine and therefore time to complete project was extended.

5. The O.Ps further contended that the different departments are involved in the matter of fixation of final price. Engineering department prepares the bills. Bills so prepared are transmitted to Estate Manager and thereafter the process of fixing of price starts. It is also contended by the O.Ps that as per law, the price can be revised.

6. Ld.Advocate Mr.Shirish Deshpande took us through the important documents and submitted that there was 33 months delay in delivery of possession of flats. He also brought to our notice that the time was essence of the contract. As per brochure, the possession was to be delivered after October 1986. In fact possession was delivered in May 1989. Ld.Advocate Mr.Shirish Deshpande also brought to our notice that original price was Rs.2,31,000/-. The said price was revised to Rs.2,52,820/- and in February 1993, the revised price was again revised to Rs.2,58,100/-. He brought to our notice that the price of the flats could not be finally determined for 45 months. Therefore the complainant society is entitled to get compensation. Rest of the grievances are not pressed.

7. On the other hand, Ld.Advocate Mr.Warunjikar vehemently argued that the initial price was a tentative price and therefore O.Ps as of right can revise the price of the flats taking into consideration the price of building materials. The tentative price is always fluctuating price, which can be revised for which demand of compensation is erroneous. It is argued that there was absolutely no delay as such on the part of O.Ps either in delivery of possession of flats or fixing of final price.

8. We gave anxious consideration to the rival submissions advanced at the bar. In is seen from the brochure that project was to be completed in October 1986. Therefore time was essence of the contract. One can understand delay of few months when the construction is on the large scale. One can also tolerate reasonable delay taking into consideration the entrustment of construction to third agency. The contractor has to face number of difficulties including unskilled and skilled labour problem. Sometimes the building material disappears from the market. Sometimes price touch the sky. Because of variety of reasons delay of few months is tolerable. However inordinate delay of 33 months cannot be tolerated. Initially declaration of tentative price is no doubt permissible to some extent. It does not mean that the O.Ps are allowed to revise the price on number of times arbitrarily, simply because they are in commanding position. O.Ps being public body cannot act arbitrarily. Public body is expected to act reasonably. Initially tentative price was declared at Rs.2,31,000/-. It was revised to Rs.2,52,820/-. Even after delivery of possession of flats, the revised price was again revised to Rs.2,58,100/- in February 1993. There was inordinate delay of 45 months in fixing final price of the flats. Tentative price was declared in August 1985. The final price was declared in February 1993. In fact final price was fixed after 8 years from declaration of tentative price.

9. On behalf of Assistant Estate Manager-Mr.Jagannath Govind Jadhav has filed his affidavit. Similarly another Assistant Estate Manager Shri Kamalakar Gangadhar Patankar has filed additional affidavit. These affidavits are nothing but declaration of excuses. Number of excuses are found and reflected in the affidavits in order to justify the actions of O.Ps. We extremely find it difficult to accept the story unfolded by the Assistant Estate Managers in their respective affidavits. These affidavits cannot be accepted for want of better particulars. For instance, difficulties of outside agency were highlighted. However name of constructing agency is not disclosed. It is also tried to be projected that some of the items were not available in market. The articles of construction are available in market for all the time provided one is ready to pay higher price. In order to achieve the target within prescribed time limit, the public bodies cannot remain idle. When some assurances are given, the Public bodies like Bombay Housing & Area Development Authority cannot give go bye to its promise given to the common man, who is helpless. Therefore the statutory authority like Bombay Housing & Area Development Authority (BHADA) cannot be allowed to take arbitrary actions. There is certainly inordinate delay in the matter of fixing of final price. Reasons assigned for delay do not stand to reason.

10. There is a ready recknor of the Corporation. The Town Planning and Valuation department also maintains ready recknor for fixing of price of flats. In addition there is an Institute of Valuers at Delhi. This Institute of Valuers provides readymade data for the pricing policy. This Institute also publishes bulletins statewise. In spite of having such a data in hand, O.Ps failed to fix the final price of the flats. It took unreasonable period of 45 months from date of delivery and 8 years from the date of declaration of tentative price. Therefore, we are of the considered view that this is a fit case to award compensation to the complainant society.

11. In the process of fixation of final price, there are apparent anomalies when compared with the final price fixed for buildings constructed by O.Ps under Code no.65. For a flat admeasuring 642.08 sq.ft. in Code no.65, final price is fixed at Rs.2,54,000/-. However a flat admeasuring 609.64 sq.ft. in Code no.66, the final price is fixed at Rs.2,58,000/-. For lesser area of flat in the same area final price fixed by O.Ps is more than final price fixed for higher area. These anomalies are not satisfactorily explained.

12. We propose to refer the decision of Hon’ble Supreme Court in the case of Lucknow Development Authority V/s.M.K.Gupta 1986/1994 National Commission and State Commission on Consumer Cases 278: III 1994(1) CPJ 569.

13. Supreme Court has observed that when a property is not delivered within stipulated period, the delay so caused is denial of service. Such disputes or claims are not in respect of immovable property, but deficiency in rendering service of particular standard quality and grade. Similarly, Supreme Court further observed that it is now accepted both by Supreme Court and English Courts that State is liable to compensate for loss for injury suffered by a citizen due to arbitrary action of its employees.

14. Bombay Housing & Area Development Authority is a semi Government body. Therefore, the O.Ps are liable to pay compensation to the complainant for deficiency in service.

15. We also refer another decision of Supreme Court in the case of Ghaziabad Development Authority V/s.Balbir Singh, 2004 CTJ 605 (SC). Supreme Court observed that the word compensation is of very wide connotation. It may constitute actual loss or exceptional loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss.

16. The Commission or the Forum is entitled to award not only value of goods or services, but also to compensate the consumer for injustice suffered by him.

17. We also refer judgement of National Commission in the case of A.P.Housing Board V/s.K.Sri Harireddy 2008 CTJ 697 (CP) (NCDRC). National Commission has observed that a statutory authority is required to perform its duties as per law, which includes the rules and regulations. If there is breach thereof in fixing the price of land and cost of construction, it would be a deficiency in service and the complaint regarding the same is maintainable before the Consumer Forums. We are therefore inclined to allow the complaint partly and pass following order:-


1. Complaint is partly allowed.

2. We hereby direct O.P.nos.1& 2 to pay compensation of Rs.1 lakh on both the counts with cost of Rs.10,000/- to the complainant society.

3. O.P.nos.1&2 are hereby directed to comply the order within a period of 45 days from the date of receipt of the order.

4. If order is not complied with within prescribed time limit, the amount of compensation of Rs.1 lakh shall carry interest @ 12% p.a. from the date of filing of the complaint till the date of realization.

5. Copies of the order be furnished to the parties.

(S.P.Lale) (P.N.Kashalkar) (B.B.Vagyani)

Member Judicial Member President