B.B. Patel & Ors. vs Dlf Universal Ltd

18 of the ABA – Allegation in the complaint is that the respondent committed unfair trade practice by seeking to recover large sums of money from the buyers without handing over possession of the flats – In the garb of delay in handing over possession of the property, the appellants are seeking possession of a property, the cost of which is more than 10 times the price at which it was offered, without even paying the balance basic sale price–Monopolies and Restrictive Trade Practices Act, 1969.

Disposing of the appeal, the Court

HELD: 1.1 The MRTP Act, 1969 was meant to ensure that the operation of the economic system does not result in the concentration of economic power to the common detriment, for the control of monopolies, for the prohibition of monopolistic and restrictive trade practices and for other connected matters. The Act was made pursuant to the recommendations made by the Monopolies Enquiry Commission which submitted its report on 31.10.1965. Initially, there was no provision relating to unfair trade practices in the MRTP Act. By Section 30 of Act 30 of 1984, Sections 36A, 36B, 36D and 36E were inserted in the MRTP Act. Unfair trade practice as defined in Section 36A of the MRTP Act is a trade practice which, for the purpose of promoting the sale, use or supply of any good or for the provision of any services adopts any unfair method or unfair or deceptive practice including other practices mentioned therein. The manner in which the inquiry may be conducted by theCommission into unfair trade practices is dealt with by Section 36B of the MRTP Act. Section 36D of the MRTP Act provides for the powers which may be exercised by the Commission while inquiring into an unfair trade practice. After conducting an inquiry, if the Commission is of the opinion that the practice is prejudicial to the public interest, or to the interest of any consumer or consumers generally, the Commission, may direct that (a) the practice shall be discontinued or shall not be repeated (b) any agreement relating to such unfair trade practice shall be void or shall stand modified in respect thereof in such manner as may be specified in the order and (c) any information, statement or advertisement relating to such unfair trade practice shall be disclosed, issued or published, as the case may be, in such manner as may be specified in the order. There was a further amendment made in the year 1991 by which Section 36C was inserted in the MRTP Act which dealt with investigation by Director General before issuing anyprocess in certain cases, apart from certain changes made to Sections 36A and 36D of the MRTP Act. The appellants have relied upon judgments of this Court on unfair trade practice in disputes under theConsumer Protection Act, 1986. The Consumer Protection Actwas meant for better protection of the interest of consumers and for the purpose, to make provision for the establishment of consumer councils and other authorities, for settlement of consumer disputes and for matter connected therewith. Section 2(r) was introduced in the Consumer Protection Actby an amendment with effect from 18.06.1993.Section 2(r) of the Consumer Protection Act defines unfair trade practice, which is exactly the same as the definition of unfair trade practice in MRTP Act. In case a consumer satisfies the consumer forum that the goods complained against, suffer from any defect or there is deficiency in service, the opposite partycan be directed to remove the defect or replace the goods free from defect. The appropriate forum can direct removal of deficiency in service and direct the opposite party to discontinue the unfair trade practice or restrictive trade practice. The forum also has the power to award any amount towards compensation for any loss or injuries suffered by the consumer due to the negligence of the opposite party. [Paras 11 and 12][66-E-H; 67-A-G]

1.2 The thrust of the complaint preferred by the appellants is that the respondent is guilty of unfair trade practice for misrepresentation as there was delay in handing over possession of the apartments and extra charges were imposed arbitrarily. According to the appellants, there was a fixed period of 2½ to 3 (two and half to three years) during which the apartments should have been handed over and there was considerable delay in the completion of the project. Imposition of extra cost was impermissible as the buyers were notinformed about such future cost at the time when theApartment Buyer Agreement(ABA) was entered into amounting to a false representation resulting in an unfair trade practice.In so far as unfair trade practice with reference to the delay in handing over possession is concerned, the relevant clauses in the ABA which was entered into between the parties on 23.3.1993 are clauses 16, 18 and 21(d) of the ABA. According to clause 16, the company is entitled for reasonable extension of time for delivery of possession of the premises, in case, possession could not be delivered within 21/2 to 3 (two and half to three) years from the date of booking. The reasons for which a reasonable extension of time is available are elaborated in clause 16. Clause 18 permits the allottee to terminate the ABA by giving a notice if the company fails to deliver the possession of the premises within the period specified in clause 16. The amount of earnest money and other amounts paid by the allottees shall then be refunded by the company. According to clause 21(d), the company shall endeavour to hand over the possession of premises to the apartment allottee as a licensee on monthly license basis on completion of payment of 40% of the sale price and other charges as per clause 21(d). There is no doubt that there has been a delay in completion of the project beyond three years. However, the appellants did not issue any notice for termination of the agreement. On the other hand, notices issued by the appellants on 24.02.1998, 22.04.1998 and 12.08.1998 related to demand of extra costs. The appellants did not, at any point of time, make a grievance relating to delay in handing over of possession of the apartment. The main relief in the complaint filed by the appellants is to declare the termination of the ABA by the respondent as void. A further direction was sought for handing over the apartments without any payments towards the remaining principal amount and extra charges alongwith damages and compensation. [Paras 16 and 17][69-G-H; 70-A-G]

1.3 In the present case, though there is a clause in the ABA which mentioned that the possession has to be handed over within a period of 2½ to 3 (two and half to three) years from the date of ABA, it cannot be said that time was made the essence of the contract as a reasonable extension of time for delivery was permissible as per clause 16. There was no intention on the part of the appellants to insist on time being the essence of contract as they did not terminate the ABA due to delay in handing over possession of the apartments which they could have in accordance with clause 18 of the ABA. As stated earlier, no notice was issued by them which related to their grievance with respect to the delay in handing over the possession. The allegation in the complaint is that the respondent has committed unfair trade practice by seeking to recover large sums of money from the buyers without handing over possession of the flats. In the garb of delay in handing over possession of the property, the appellants are seeking possession of a property, the cost of which is more than

10 times the price at which it was offered, without even paying the balance basic sale price. None of the ingredients constituting an offence of unfair trade practice as elucidated by this Court in Colgate Palmolive (India) Ltd. v. MRTP Commission &Ors. have been substantiated by the appellants. On a detailed consideration of the material on record, this Court is of the considered view that there has been no misrepresentation made by the respondent amounting to an unfair trade practice for the delay in handing over possession of the apartments.The extra charges that were demanded by the respondent were pursuant to clauses 2(b), 4,

15 and 16 of the ABA. According to the appellants, demand of extra charges after the commencement of construction amounted to manipulation of prices which resulted in increase in the cost to the detriment of the buyers. Extra cost demanded by the respondent was incurred due to introduction of a third lift in each tower, space being provided for laundry facility in basement and larger entrance lobbies in each tower. Other charges relate to firefighting system, external electrification and normal operation and maintenance costs of recreational facilities. It is pertinent to note that the cost towardsescalation of material and labour after the 30.03.1996 was not included in the demand. Even the additional cost incurred due to revision in the schedule was born by the respondent. There is no dispute that appellants had paid initial instalments towards extra charges. The respondent had also duly informed the appellants of the details of the extra cost being incurred. This Court is not in agreement with the contention of the appellants that imposition of extra charges is a calculated and pre- planned design of the respondent. There is no misrepresentation made by the respondent and, therefore, the allegation of unfair trade practice is rejected. [Paras 19-21][71D-G; 72-D-H; 73-A] Colgate Palmolive (India) Ltd. v. MRTP Commission & Ors. (2003) 1 SCC 129 : [2002] 4 Suppl. SCR 219 – relied on.

1.4 There is no quarrel with the proposition in Central Inland Water Transport Corporation that an unconscionable term in a contract is void under Section 23 of the Indian Contract Act, 1872. The other casesrelied upon by the appellants pertain to disputes under the Consumer Protection Act. All the three cases relate to either refund of the amounts deposited by the flat buyers or payment of compensation for delay on the part of the builder in handing over possession of the flats on a clear finding of fact that the delay in handing over possession was solely attributable to the builder. After examining the terms of the Agreement in those cases, this Court was of the opinion that entitlement of the flat buyers to compensation for deficiency in service on the part of the builder cannot be restricted by the agreements which are one sided. The said judgments are not applicable in the instant case. The reliefs claimed in the said cases are completely different from the main reliefs in the present case. In the said cases, the grievance of the flat buyers was that since there had been a substantial delay in delivery of the apartments, the buyer should be entitled to terminate the agreement and to recover the amounts already paid along with just and reasonable interest/compensation which could not be confined to theterms as stated in a one-sided agreement. As against this, the appellants in this case are essentially seeking possession of the apartments by declaration of termination of the agreement by the respondent to be void, without having to pay any money towards extra charges or even the basic sale price. There has been no specific reference to any clause in the ABA by which the appellants appear to be aggrieved so as to shock the conscience of this Court to travel beyond its terms in light of it being an unconscionable contract.There is an averment in para 16 of the complaint that ABA is an unconscionable contract opposed to public policy as a consumer has no bargaining power and is an easy victim of unfair trade practice. There is no reference to any clause of the ABA, in particular, to substantiate the allegation. On the other hand, the appellants repeatedly refer to the allegation of delay in handing over possession and imposition of extra charges apart from nonrefund of interest on the amounts paid by them. The appellants are not entitled to any relief on this count as the order of MRTP has already been approved by this Court by holding that there is no unfair trade practice on the part of the respondent. The compensation sought by the appellants cannot be granted as Section 12-B of MRTP Act empowers the Commission to grant compensation only when any loss or damage is caused to a consumer as a result of a monopolistic, restrictive or unfair trade practice. As the appellants have failed to prove unfair trade practice on the part of the respondent, they are not entitled to any compensation. [Paras 23 and 24][74-D-H; 75-A-D]

Pioneer Urban Land & Infrastructure Limited v. Govindan Raghavan (2019) 5 SCC 725; Wing

Commander Arifur Rahman Khan And Aleya Sultana & Ors. v. DLF Southern Private Limited (2020) 16 SCC 512; Ireo Grace Realtech Private Limited v. Abhishek Khanna & Ors (2021) 3 SCC 241 – held inapplicable. Central Inland Water Transport Corporation Ltd. & Anr. v. Brojo Nath Ganguly and Anr. (1986) 3 SCC 156 : [1986] 2 SCR 278 – referred to.

1.5 The learned Senior Counsel for the respondent submitted that the price of each flat is Rs.3.25/- crores today. In response to the suggestion made by this Court, he obtained instructions from the respondent and submitted that the respondent is willing to handover the flats provided the appellants pay the balance amount payable i.e., Rs.31,52,933/- for each flat. It is settled law that final relief granted by this Court need not be the natural consequences of the ratio decidendi of its judgment.Though, this Court has upheld the order of MRTP Commission, in the interest of justice, the respondent shall handover possession of the flats to the appellants on payment of Rs.25,00,000/- (Rupees Twenty-Five Lakhs Only) for each flat by the appellants. [Paras 25 and 26][75-D-E, G-H; 76-A-B] M/s Lakhanpal National Limited v. M.R.T.P. Commission & Anr. (1989) 3 SCC 251 : [1989] 2 SCR 979; M/s Philips Medical System (Cleveland) v. Indian MRI Diagnostic & Research Limited (2008) 10 SCC 227 : [2008] 13 SCR 1140; Rajasthan Housing Board v. Parvati Devi (2000) 6 SCC 104 : [2000] 3 SCR 934; Bangalore Development Authority v. Syndicate Bank (2007) 6 SCC 711 : [2007] 7 SCR 47; Sanjay Singh & Anr. v. U.P. Public Service Commission & Anr. (2007) 3 SCC 720 : [2007] 1 SCR 235; U.P. Public Service Commission v. Manoj Kumar Yadav & Anr (2018) 3 SCC 706 – relied on.