IN Interest of Equity & justice: National Consumer Court

Here is a verdict of the Apex Consumer Forum; wherein the Court ordered equitable penal interest to the complainant as was charged by the colonizer.. please go through this very useful judgement.................

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

REVISION PETITION No. 857 of 2010

(From the order dated 20.11.2009 of the Haryana State Consumer Disputes Redressal Commission, Panchkula in Appeal no. 609 of 2006)

Haryana Urban Development Authority

Through its Estate Office, Gurgaon

Haryana                                                             Petitioner

Versus

Pawan Kumar Gupta

Son of Shri C P Gupta

43 Sarojini Park                                                  Respondent

Shastri Nagar

New Delhi – 110 031

BEFORE:

                    HON’BLE MRS REKHA GUPTA         ,   PRESIDING MEMBER

For the Petitioner                         Mr R S Badhran, Advocate

For the Respondent                      IN PERSON

Pronounced on 10^th July 2013

ORDER

REKHA GUPTA

        Revision petition no. 857 of 2010 has been filed under section 21 (b) of the Consumer Protection Act, 1986 against the order dated 20^thNovember 2009 passed by the Haryana State Consumer Disputes Redressal Commission, Panchkula in First Appeal no. 609 of 2006.

        The brief facts of the case as per the respondent/complainant are as follows:

        The respondent had applied for allotment of 10 Marla Plot in Sector 9, Gurgaon to the Petitioner/ Opposite Party vide application no. 014712 dated 20.08.1992 and has deposited earnest money of 10% amounting to Rs.22,836/- in cash on 20.08.1992.

        Respondent was allotted a plot bearing no. 1184 ad-measuring 10 marlas, i.e., 220 sq mtrs, in Sector – 9, Gurgaon vide memo no. E O (G)/ ALT – 9/ 961 dated 09.07.1993 issued by the petitioner and a sum of Rs.34,924/-, i.e., 15% of the total tentative price was deposited with the petitioner vide Bank draft no. 283813 dated 24.07.1993 drawn on SBI, Laxmi Nagar, Delhi and thus 25% of the total price was paid at the time of allotment and the balance 75% sale price was payable in 6 yearly instalments. The respondent has also deposited Rs.1,51,031/- towards the cost of additional price i.e., 574/- sq. yds, as desired in notification no. 7904 dated 03.05.1999. Thus full and final payment has been received by HUDA in 1998 and escalated price also on 23.03.2002.

        The respondent has paid Rs.3,80,031/- as per the above list enclosed and the petitioner had received full and final payment but they unduly delayed the possession of plot for no fault of the respondent causing undue harassment, mental agony and irreparable loss.

        The above said plot was allotted to the respondent with a provision to offer possession of the same after completion of its full development in the area at the earnest and not later than two years. But now more than 12 years have passed since the date of allotment of the said plot and the petitioner has not bothered to offer. The possession of the said plot to the respondent till this date after completion of full development work in the area, inspite of repeated requests and personal visits to the office of the petitioner.

        Time and again, the respondent has visited the site. During long spell of 12 years, the petitioner neither developed his site well nor supply of sewage system, water supply and other amenities. Facilities like community centre, school, health centre required for the residential colony as declared by the petitioner, has yet to be provided.

        Furthermore as the possession was not given even after 12 years it has another impact, i.e., the cost of construction, cost of steel, cement, building material and labour charges etc., has increased approximately by 300%. Thereby what could have been done at a cheaper rate, will now, be done with more.

        The petitioner/ opposite party in their reply have stated that paragraph no. 4 of the complaint is wrong, baseless and hence denied. The area of this plot is fully developed and only thereafter physical possession was offered to the allottee vide this office memo no. 2749 dated 29.06.2001. As per the terms and conditions of the allotment the respondent/ allottee was given an offer of possession, but the allottee failed to even start the construction work and hence he is bound to pay the extension fee as per HUDA policy.

        Paragraph no. 7 of the complaint was also denied by stating that the area is fully developed and physical possession had already been offered to the allottee on 29.06.2001. The allottee failed to start the constructions and complete the building within two years from the date of offer of possession.

        The District Consumer Disputes Redressal Forum, Gurgaon (in short, ‘the District Forum) came to the following conclusions after going through the file and hearing the parties:

“Possession has been admitted to have been delivered during the proceedings. As per application dated 16.12.2005 conveyance deed is not being executed. It is ordered that the same be executed on furnishing papers by the complainant, if any, besides the complainant is awarded interest @ 18% per annum on deposits from the dates of deposits till the delivery of possession of his plot on the spot by demarcation and this interest is being awarded keeping in view the rise in construction cost so as to compensate him as he has been waiting for the plot since, 1993. During the arguments counsel for the complainant contended that another illegal demands have been raised vide memo no. 17260 dated 15.09.2005. We have perused the said letter Rs.8,246/- have been demanded as instalments due to on 15.10.2005 and Rs.88,335/- towards enhancement which could be recovered as per terms of the allotment. However, Rs.14,565/- demanded as extension fee could not be demanded as physical possession was delivered only on 24.10.2005. This last demand is struck down and this amount is ordered to be refunded to the complainant with interest as per HUDA policy from the date of deposit till the date of refund. As regards the plea that the complainant had already paid amount of instalment and enhancement in 10/99 and March 02 respectively, he has not mentioned any receipt number or date. He can agitate the matter again with the HUDA and in case the complainant paid amount of instalment and enhancement double, respondent is liable to refund the said amount to the complainant along with interest from the date of deposit till the date of refund as per HUDA policy. There will be no other orders as to costs. Compliance of the above order be made within one month from the receipt of the copy of this order”.

        Aggrieved by the order of the District Forum, the petitioner/ opposite party filed an appeal before the State Commission.  The State Commission in their order has recorded that “none has put in appearance on behalf of the appellant. Perusal of the file shows that this appeal is old one and relates to the year 2006. No one has taken care to appear on behalf of the appellant before this Commission from the last four consecutive hearings, i.e., 11.06.2007, 29.08.2007, 17.01.2008 and 27.01.2009. Even today none has appeared on behalf of the appellant. Since this appeal is old, therefore, we do not find any justification to adjourn the case time and again. Hence we proceed to decide this appeal after going through the case file”.

        The State Commission thereafter came to the following conclusion:

“We have gone through the impugned order and taken into consideration the facts and circumstances of the case and are of the view that it is a case where the plot no. 1184, Sector – 9, Gurgaon was allotted to the complainant on 09.07.1993 whereas the physical possession of the same was handed over to the complainant on 24.10.2005 during the pendency of the proceedings before the District Forum, i.e., after a period of more than 11 years, which itself shows deficiency in service on the part of the opposite party. Therefore, we do not find any ambiguity or illegality in the impugned order passed by the District Forum. No case for interference in the impugned order is made out.

        No merit. Dismissed”.

        Hence, this present revision petition.

        The main grounds for the revision petition are as follows:

-          Forums below erred in facts and law, and have misread, misconstrued and misinterpreted the documentary evidence available on record and also the mandatory provisions of law applicable on that fact while passing the orders dated 20.11.2009. In fact the counsel for the petitioner was not present at the time of deciding the matter which devoid the petitioner herein being heard and explain the position of the matter before the State Commission. The petitioner thus lost the opportunity to bring the true facts before the Commission.

-          The Forums below failed to appreciate that the respondent herein is bound by the terms and condition of the allotment letter as well as provisions of Act, Rules and Regulation, policies instructions framed and issued in this regard from time to time. The respondent herein is bound by the aforementioned rules, instructions and policies of the petitioner herein and to pay the outstanding amount as demanded by the petitioner herein.

-          The Forums below have not taken into consideration that the offer of possession of the plot was made after completion of all the developments works on 29.06.2001. However, it was the respondent herein who instead of taking the possession filed the complaint with ulterior motives. The complaint was thus not maintainable. The District Forum has travelled beyond its jurisdiction in entertaining the complaint under the Act, which ought to have been dismissed.

-          The Forums below failed to appreciate that vide Memo no. 17260 dated 15.09.2005 demand of Rs.14,564/- as extension fees was rightly raised as the respondent herein has failed to construct the building as per the terms and conditions of the allotment and as per HUDA Policy. The Forums below erred in striking down the said demand even though the same was demanded as per rule and regulations of HUDA policy and as per the terms and conditions of the allotment letter.

-          The Forums below erred in awarding interest @ 18% per annum on deposits from the date of deposits till the delivery of possession of plot on the spot by demarcation. As already submitted the possession of the plot was offered on 29.06.2001 and it was the respondent who failed to take the possession of the plot, as such there is no deficiency in the service. Moreover the interest so awarded is too high.

I have heard the counsel for the petitioner and respondent in person and have gone through the record.

Nowhere in the revision petition has it been mentioned as to why no one had put in appearance on behalf of the petitioner/ appellant on the last four consecutive dates in the State Commission on 11.06.2007, 29.08.2007, 17.01.2008 and 27.01.2009. Thereafter the petitioner cannot complain that they were not given opportunity to bring the true facts before the State Commission.

The counsel for the petitioner drew my attention to the offer of possession dated 29.06.2001 and stated that it is the fault of the respondent that he did not take immediate possession. However, the respondent denied having received this communication. Counsel for the petitioner could not provide any evidence that the said communication had been received by the respondent.

Counsel for the petitioner then stated that the petitioner was objecting to pay 18% interest because as per the terms and condition of the allotment letter it was not due. He drew my attention to paragraph 7 of the allotment which states that “possession of the site will be offered to you on completion of the development works in the area, where situated”.

It is however, patently unfair that this clause is open ended with absolutely no time limit. The petitioner had taken full payment from the respondent by March 2002 with the first payment being taken in August 1992.

It is an undisputed fact that plot bearing no. 1184, Sector -9, Gurgaon was allotted by the petitioner to the respondent vide memo no. E O (G) /ALT – 9/ 961 dated 09.07.1993 at a tentative base price of Rs.22,836/-. Full and final payment including the escalated price was paid by 23.03.2002. However, the physical possession of the plot was given only on 24.10.2005. The respondent has now received both physical possession of the plot as also the conveyance deed. The petitioner is objecting to pay interest @ 18% per annum for the period upto 29.06.2001. The respondent has stated however, that since interest has not been paid till date, he should get the same even for the period beyond 2005.

In view of the above, we find that there is no jurisdictional error, illegality or infirmity in the order passed by the State Commission warranting our interference. However, as per the terms and conditions of the allotment letter, the interest payable by allottee in case of default is 15%. In all fairness and in the interest of equity and justice, the order of the District Forum is partially modified by reducing the rate of interest from 18^% to 15% per annum. Rest of the order stands as it is.

In view of the foregoing, the revision petition stands disposed of.

                Sd/-

        ………………………………..

[Rekha Gupta]

Interest on EDC:- National Consumer Court's Judgement

Here is what the Hon'ble National Consumer Forum decided on 1/08/2013 in the case of Mr. Rohthas Singh & ANR vs Ansal Properties & Infrastructure Ltd, wherein the grievance raised was whether the Complainant/home buyer is liable to pay Interest on EDC installments or not. The Court observed that the crucial point is, when was the 'EDC' paid and when was it deposited, by the Builder.
Please go through the judgement to get a fair Idea of the opinion of the law and the court in this matter;

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

REVISION PETITION NO. 760 OF 2013

 (From the order dated  30.11.2012 in Appeal No. 1127/2012 of the

State Consumer Disputes Redressal Commission, Haryana, Panchkula)

1. Rohtash Singh         , S/o. Sumer Chand

C/o Vijay Hood, H.No.13/20, 8 Marla

Radha Krishan Mandir, Panipat, Haryana

2. Smt. Santra Devi

W/o Rohtash Devi

R/o. H.No.13/20, 8 Marla

Radha Krishan Mandir, Panipat, Haryana                      …  Petitioners

Versus

M/s Ansal Properties and Infrastructures Ltd.

Narula Hotel, Panipat

Also at :

115, Ansal Bhawan

16, K.G. Marg, New Delhi                                                  …  Respondent                                                     

BEFORE:

      HON'BLE MR. JUSTICE J.M. MALIK, PRESIDING MEMBER

      HON’BLE DR. S.M.KANITKAR, MEMBER

       

For  the Petitioners : Mr. Naveen Kumar Raheja, Advocate

For the Respondent : Mr. Dalip Mehra, Advocate

                                    Along with Ms.Sugandha, Advocate

                                                                                                   

                                                                                                                                                                                                                          

PRONOUNCED ON_1^st AUGUST, 2013

ORDER

JUSTICE J.M. MALIK

1.      The controversy  revolves  around the question, “Whether the Sh.Rohtash Singh, complainant No.1 and Smt.Santra Devi, his wife/Complainant No.2, are liable to pay  interest?”. M/s.Ansal Properties & Infrastructure Ltd., the respondent,  claimed interest upon External Development Charges (hereinafter referred to as ‘EDC’, in short), from the petitioners, under Clause 2 of the Agreement, which runs as follows:-

          “Apart from the above internal services, if any external and/or peripheral services are provided by any Haryana Urban Development Authority or any local authority for any bigger zone and any charges is levied thereof and/or any other charges are levied in any respect, the same shall also be payable in addition to the aforesaid price of the plot and be paid on pro-rata by the buyer as determined by the Director, Town and Country Planning, Haryana”.

2.      The complainants bought a plot in Sushant City Project of the respondent/opposite party in Panipat  vide agreement dated 24.04.2010.  The complainants contend that  they have paid entire sale  price and other  charges of the plot as per the terms and conditions of the agreement. However,  the complainants  were  astonished to receive a demand notice from the opposite party, in the sum of Rs.4,63,964/-, on account of interest on the EDC.  The complainants filed complaint before the District Forum alleging that there was deficiency in service. 

3.      The opposite party raised the following defences in its  written  statement.  As per clause 2 of  the agreement,  the complainants are bound to pay the said amount. The  opposite  party  explained  that  there were two options for the complainants to pay the EDC, i.e., either in lumpsum or in installments.  The complainants chose to make the payment of  EDC, in installments.  Had  they  paid  the EDC, in lumpsum, they would not have been charged the interest, but in  the case of  payment  of  EDC, in installments, the  interest was  charged.  It was explained  that  at the time of calculation of  installments of EDC, due to calculative  mistake,  the interest  was  not included in the installments.  It  is averred that OP is not claiming the interest on the ground of delayed  payment  by the complainants to the OP but the same  was to be deposited by the opposite party/petitioner with  Haryana  Urban Development Authority.  It is common knowledge  that  if the amount  is to be paid in installments,  then  interest is to be charged on the principal amount.  Out of 1139 allottees, 283 allottees have already paid  the interest portion on the basis of subsequent  demand  notice made  by  the respondent.  The respondent  realized  its mistake  in  August, 2010  when  the Audit Report was filed.  The District Forum, Panipat has no jurisdiction and  only  Delhi Consumer Fora  have got the jurisdiction. HUDA is a  necessary party.

4.      OP  has  placed  on record the copy sent to the complainants dated 28.12.2010, wherein, the said amount  was demanded.  The said

letter runs, as under:-

“Dear Sir/Madam,

Due to an oversight, we did not charge you interest for the period over which external development cost installments were scheduled to be payable by you even as interest is payable by us to the Government. The fact of non-charge of interest can be verified by you from the facts on record in the letter of allotment.

Accordingly, you are advised to pay a sum of Rs.4,63,964/- being the dues on account of interest thereon without prejudice to other sums payable by you as part of the sale consideration and as per our terms and claims thereof.

In case you need any clarification, you are requested to get in touch with our local sales office at 0180-2649601/02/03.

Sd/- 28.12.2010”.

5.      The petitioner  has  also  placed on  record  the total statement of account. 

6.      We have heard the counsel for the parties.  Counsel for the petitioner/OP has cited three authorities which were reported in :-  (1) M/s. Mackinnon Mackenzie & Co.Ltd. Vs. Audrey D’Costa & Anr., SLP (Civil) No.1265 of 1987, decided on 26.03.1987;  (2) Sri Tarsem Singh Vs. Sri Sukhminder Singh, SLP (C ) No.4639 of 1998, decided on 02.02.1998; and (3) A.P.Kochudevassy Vs. State of Kerala, A.S.No.177 of 1976 (High Court of Kerala),  decided on 05.11.1981.

7.      In these authorities,  it was laid down that the parties are bound by the agreement. 

8.      We do not pick up a conflict with this legal proposition.  However, we find  that  the defence  set up by the petitioner is vague, evasive, ambiguous and leads us, nowhere.  In absence of clear facts, the petition does not begin to jell.   Dollops of mystery  surround  this case.  It is not clear  whether  the complainants  were informed about the fact  that  they will have  to pay interest, if they will  pay EDC, by installments or  not.  There is no such inkling in the agreement.  There is no evidence that this position was made clear to the complainants. 

9.      We are of  the  considered  view that the case should be remanded to the District  Forum, Panipat,  and we, accordingly, remand the matter to the District Forum, Panipat.  Both the parties are given opportunity to lead their respective evidence, on this point.  This is a material  point and  if  the respondent/OP  has failed to  disclose  all these facts to his clients, in that event, it would be deficiency on its part. 

10.    Secondly, all the details regarding payment of installments were

not furnished.  This  was also  not shown  that the installments  were paid to the Government/HUDA, immediately, which delayed the above said deposit  of  the amount, is a fact,  which is shrouded in mystery.  The documentary evidence should be placed on record before the District Forum, Panipat, to show that the respondent/OP was prompt in depositing the amount, with the  Government/HUDA.

11.    Thirdly, it is not clear, as to “When the amount was paid and when the amount was deposited?”.  Was there any delay in depositing the amount on the part of  the respondent/OP?  In that event,  the petitioners/complainants  should not  suffer  for the  same.  Clear cut evidence should come on  the record. Is it a case of contributory negligence?.  If so, what is its effect?  Each day’s explanation is required.  The Circular of  the Government/HUDA that  the money should be paid immediately,  and  in that event, no interest should be charged, and if it is paid in installments, only then interest could be charged,  was  also  withheld.  Both the parties and, particularly, the respondent/OP  is  given opportunity to bolster  its case with  solid and unflappable  evidence. The  main crucial  point  is,  when the ‘EDC’ was paid, and when it was deposited.  The  parties  are directed to appear before the District Forum, Panipat, on 04.10.2013.  The District Forum, Panipat, will try to expedite this case.

          The revision petition is disposed of, in above terms.

            ..…………………..………

    (J.M. MALIK, J.)

      PRESIDING MEMBER

                                                             

  ……………….……………

                                                        (DR. S.M.KANITKAR)

                                                                            MEMBER

 

dd/11

Apartment:- Meaning as per Indian Laws

An apartment, colloquially speaking, is a self contained housing or dwelling unit that occupies part of a building. In most commonwealth nations including India, an apartment is commonly known as a Flat. The concept of apartment came about due to increasing population and scarcity of available land to meet the growing need for housing, for an ever increasing population. To effectively cater to housing needs of crores of Indian, it was thought best to follow the system of vertical growth, whereby Flats or Apartments would be allowed to be sold to public at large who would own the said spaces within the said apartment and co-own or co-share the other areas as common property. To provide ownership of said unit, make it heritable and transferable property and define the common areas and facilities and the percentage share of each apartment owner in the apartment building the Apartment Ownership Act, was enacted. Housing being State subject, each State depending on available need and infrastructure, legislated somewhat similar versions of Apartment Ownership Acts. In Maharashtra it came to be known as The Maharashtra Apartment ownership Act, 1970. In West Bengal, the same was legislated as The West Bengal Apartment Ownership Act,1972. (Below is a list of various Apartment Ownership Acts of various States)

Legally speaking, as of today, most States in India have somewhat different meaning of an "Apartment", In Haryana, Maharashtra etc, an Apartment means, " a part of the property intended for any type of independent use, including building having one or more rooms with enclosed spaces located on one or more floors or any part or parts thereof, to be used for residence, office or for practicing any profession or for carrying on any occupation, trade, business or manufacturing or other uses related to information technology or for such other type of independent use, as may be prescribed, with a direct exit to a public street, road or highway or to a common area leading to such street, road or highway and includes any garage or room (whether or not adjacent to the building in which such apartment is located) provided by the Colonizer/owner of such property for use by the owner of such apartment for parking any vehicle or for residence of any person employed in such apartment, as the case maybe'.

On the other hand, States such as West Bengal, Himachal Pradesh and Kerela etc, define an Apartment as, " a part of the property  intended for any type of independent use, including one or more rooms or enclosed spaces located on one or more floors ( or part or parts thereof) in a building intended to be used for residential purposes and with a direct exit to a public street, road or highway or to a common area leading to such street, road or highway".

From the above definitions it is evident, that there exists a major and substantial difference in the meaning assigned by different States to an Apartment. In Haryana or Maharashtra, meaning of apartment is obfuscated with the usage of the space, like office or for practicing any profession, trade, business and even manufacturing  whereas States like West Bengal and Himachal Pradesh have quoted singular use of an apartment as Residential. This glaring discrepancy is negating and defeating the very purpose of the Act, which was to provide co-ownership of all common areas and facilities to the association of owners of the said apartment building. Due to these varied definitions in the States where the meaning of Apartment has been tweaked to incorporate different uses such as trade etc, the Colonizers have sold shops and other such facilities in the name of being an Apartment to third parties which it would not have been able to, had there been a singular meaning. It is pertinent to note that as per the Act the common areas such as shops, schools, dispensaries, service personnel flats and Community center etc all have to be co-owned by all apartment owners through an association. Therefore, definitions which give such large scope for manipulation to Colonizers, are creating unrest among the society, which invariably leads to humongous legal tussles between the State Authorities, Colonizers and apartment owners.

Usually all States have their respective Building Bye-laws that Govern the Construction and Development of the Group Housing Colonies. In Haryana, The Haryana Development and Regulations of Urban Areas Act, 1975. Similarly in Uttar Pradesh, The U.P. Industrial Area Development Act, 1976, govern the various provisions and regulations with respect to the building bye-laws of the particular State. It is evident from these Acts that the Statutory Authorities in each State are either issuing license's or leasing land to Colonizers for construction and development of a specific colony, either it is plotted colony, Group Housing colony or Commercial Complex, shopping mall or Information technology "Cyber Parks" or Industrial spaces. Therefore, before commencement of the project it is very clear to the Colonizer and the Statutory Authority, what the prescribed use of that colony would be after construction and development. Whether it would be used for residential, in case of plotted Colony/group Housing colony or it would be used for commercial purposes, like in case of shopping mall etc, or would be for setting up Industrial spaces, like SEZ etc,. For all different usages, the Building Bye-laws are different in each State, as prescribed by their respective Acts. The F.A.R, the Ground Coverage, the license fee, the lease rent etc all vary for each category of usage, as per rules that govern such activity in the State. For Apartment's in each State in India, the word residential is attached in almost all rules and regulations prescribed by various State Acts that govern the Building Bye-laws for Construction and development of planned urban development within each State. For Example in Haryana, The Haryana Development and Regulations of Urban Areas Act, 1975, defines under Section 2(c) The Colony as, " an area of land divided or proposed to be divided into plots or flats for residential, commercial, industrial, cyber city or cyber park purposes or for the construction of flats in the form of Group Housing  or for the construction of integrated commercial complex's". It is pertinent to mention that the Act is crystal clear in terms of the usage of Flats or plots when it prescribes, categorically the usage, as Residential. The same is further reiterated under Section 2(gg) where it defines a "Flat", " means a part of any property, intended to be used for residential purposes, including one or more rooms with enclosed spaces located on one or more floors, with direct exit to a public street or roads or to a common area leading to such street or roads and includes any garage or room whether or not adjacent to the building in which such flat is located provided by the colonizer/owner of such property for use by the owner of such flat for parking any vehicle or for residence of any person employed in such flat, as the case may be;". Therefore reading both the definitions together, it is evident that the law makers had a clear idea that the Flat or Apartment is a residential dwelling unit.

Then why have they not incorporated the same in the definition of Apartment in the "Apartment Ownership Acts", why some States have deemed it fit to assign varied, multiple and complex meaning to an apartment?? The problem that arises from such complex definition is that apartment owners in each State are fighting to get the Common Facilities back from their respective builders, who have sold the same under the pretext that according to the Act the shops etc are an apartment, which they have been allowed under the Act to sell. Isn't it time that either the Central Government through the Urban and Housing Ministry, directs the State Governments to follow a unified definition of an apartment or the Supreme Court upholds a singular definition for an apartment, which would simplify and erase ambiguity on its meaning through out India. Hope it is brought about soon, so that apartment owners, do not feel cheated and get the fair share of common areas within their respective group housing colonies.

Some of The Apartment Ownership Acts in India:-
1. https://dda.org.in/tendernotices_docs/july09/THEDELHIAPARTMENTOWNERSHIPACT1986.pdf
2. http://www.wbhousing.gov.in/files/WB%20APARTMENT%20OWNERSHIP%20ACT%201972.pdf
3. http://housing.maharashtra.gov.in/Sitemap/housing/pdf/actsrules/Maharashtra%20Apartment%20Ownership%20Act%201970.pdf
4.http://ada.iiita.ac.in/documents/UPApartmentAct07-Revised.pdf
5.http://himachal.nic.in/tcp/ACT_RULE2005.pdf
6. http://www.apoak.org/downloads/Kerala-Apartment-ownership-act-1983.pdf

Era Threatens Consumers to withdraw cases or face cancellation

Below is transcript of a consumer of Era Divine Court Faridabad. The reality is the moment the Home Buyer gets information of the deliberate fraud of the company that he has booked into, the company, irrespective of it's land bank or its reputation in the industry, feels important to initiate action that would ensure compliance to its rules or else it would use the last weapon to terrorize the buyer by sounding the Cancellation threat. Please care to go through the below mentioned para's which evidently prove the intention of the company which called the consumer to settle the dispute and when it saw the consumer is not budging..they used the old weapon of cancellation to guarantee compliance..  God save the consumers.. they have nowhere ..they have no one to support... its a fight of an individual, sadly and remain so unless every consumer gets involved..  


Today i had a meeting with Neeraj Kulshrestha at Noida Office , at 10:00 AM,.

There he raised the issue that what do i want,?

I told him that you dont have License, Land, you are not constructing the project deliberately & you are not responding to our genuine concerns regarding Legalized possession, Penalty,You are sending Cancellation letters to buyers,and threatening them to pay EEDC which has been stayed by the Court. 

He told that we have done agreement with the Licensee, and taken the rights to Construct,Market &sell the project and that is legal thing. I told him that the Haryana Development & regulation of urban areas act 1975 , which is the law that governs this business does not allow this activity. i told him that you are not recognized by the govt. , yet you are asking us to pay the EEDC , by showing the Government Notification. 

He ultimately told that if you have so many doubts than why dont you exit.He even told me that he will not take transfer charges for my unit, if i want to exit. I told him that i have given you money to buy a home, and after investing my Time of two yrs, now you are saying that i exit, even if i exit than i will not get the returns which other projects in neighbourhood are giving. because the image of the company has been spoiled in the market due to your activity in all  projects of your company.

He Told me that if you want to stay in this project , than i can assure you that i will get a fully legalized end product, and what else you want,

I told him about penalty, because of the fact that you are giving various reasons for the delay in development,No body knows what will happen in future also, and if you take your time in building the project than, as per the Builder buyer agreement you should pay me the Penalty Monthly. He told that he cannot pay the penalty in monthly form, but told me that he will pay the penalty at the time of possession. I asked him at what interest will you give me that penalty at the time of possession, he told me that this he will talk with his seniors and tell me in evening.And also told me that mostly it will be done. Also he told that he will send me a email in the evening, Where by he will give in writing that:-

1 How will they give legalized possession?

2 . At what rate of interest he will give me the penalty, at the time of possession.

3. Tentative date of possession.

After this assurance by him, i told him that i will examine your proposal and than i will decide.

And Meeting was over.

In evening I got a Call from Neeraj Kulshrestha , that he will not be able to give anything in writing, and he asked me to believe in his words. I  told him that , in the morning you told me that you will give everything in writing and in the evening you are saying the opposite and still you are asking me to believe you about a thing, that will take place, 2-3 yrs from now. May be in the meantime you may leave this company and join some other company, and a new boss, may not even recognize us.Also you are asking me to withdraw the case. than it is only  possible with written promises.on our genuine Demands. We are not asking you any out of the contract, and the demands can be very easily met by your company.

He told me that he cannot give anything in writing, than i told him that than there is no use of the oral promises. 

He threatened me that if i continue with case than he will cancel my flat and send me the refund. and than cut off the phone.

Mr Kashmiri Lal ji who also received the call of Neeraj Kulshrestha where he threatened that he will cancel flats of all buyers who have done Legal case against them.

FLOOR AREA RATIO

In India, different states have their own rules that govern the principle of FAR. FAR is Floor Area Ratio. It is the quotient obtained by dividing the multiple aggregate covered area on all floors and 100 by the area of the plot .
To put it more simply FAR= Total Covered Area on all Floors X 100
                                                                Total Plot Area

In Haryana the FAR for Group Housing Projects is 1.75. That means if a Builder has 20 Acres of land he is allowed to build 20 Acres X 4046.86 X 1.75 = 1,41,640.1 Sq Mtrs. In Noida, till recently the FAR was 1.5, therefore a builder with 20 Acres of land in Noida, could only build 20 Acres X 4046.86 X 1.50 = 1,21,405.80 Sq. Mtrs.  The less Coverage on identical Acreage gives consumers more open spaces and less density of Population.

The advantage of fixing this parameter, as opposed to others such as height, width or length, is that Floor Area correlates well with other considerations relevant to the Zoning Regulations of the state or development authority, such as density of population per acre, total number of dwelling units per acre, total services such as EWS flats, STP, and other community and municipal services. The quantity of these services remain constant for a given floor area ratio, regardless of how the area is distributed horizontally and vertically.It however does not mean that this system does not have flaws. In a country like India where the checks and balances are not properly implemented and Laws are loosely followed, it becomes increasingly difficult to protect the violations, as the interpretation of FAR can easily be skewed and hence not easy to measure as easily as the other traditional methods of design.

In Haryana, there is no definition of the Covered area of a floor, in any of the Acts that govern the Building rules/provisions/regulations in the state. Over and above this flaw, which helps builders create their own interpretation of the Covered Area, there are areas that are not covered under FAR or are FAR free. For Example, the basements for parking plus other services like generator room/Air conditioning plant, the Projections such as Canopy, sunshade, Chhajja, Balcony, or an architrave cantilevered from the face of the wall etc, which all areas further create confusion towards easy calculations of the FAR.

The Definition of Covered Area can only be ascertained from the Bureau of Indian Standards (IS 3861: 2002). Category 4.1 states, " Plinth Area shall be the Built up covered areas measured for the categories mentioned in 3.2 and shall include such area as given in 4.1.1 and exclude the areas given in 4.1.2.". For the Purpose of Plinth Area, following shall be included: (4.1.1)
a) Area of the wall at the floor level excluding plinth offsets, if any; when the building consists of columns projecting beyond cladding, the plinth area shall be taken up to the external face of cladding ( in case of corrugated sheet cladding outer edge of corrugation shall be considered);
Note- In case, a common wall is owned jointly by two owners, only half the area of such walls shall be included in the plinth area of one owner.
b) Shafts for sanitary, water supply installations, garbage chute, telecommunication, electrical, fire-fighting, air-conditioning and lifts;
c) stair case;
d) in case of open veranda with parapets:
 1) 100% areas for the portion protected by the projections above, and
 2) 50% area for the portion unprotected from above.
e) 100% area of the balcony protected by projection above and 50% area of the unprotected balcony; and
f) in case of alcove made cantilevering a slab beyond external wall:
 1) 25% of the area for the alcove of height up to 1 meter,
 2) 50% of the area for the alcove of height more than 1 meter and up to 2 meter, and
 3) 100% of the area for the alcove of height more than 2 meters.

4.1.2. The following shall not be included in the plinth area ( see 2.1):
 a) Area of the loft;
 b) Area of architectural band, cornice, etc;
 c) Area of vertical sun breaker or box louver projecting out and other architectural features, for example slab projection for flower pot etc;
 d) open platform;
 e) Terrace;
 f) Open spiral/ service stair case; and
 g) Area of mumty, machine room, towers, turrets, domes projecting above terrace level

Therefore it is clear that BIS is saying one thing while the Acts that govern FAR, have adopted an ambiguous  and contradictory meaning to the calculation of FAR. Which makes it easy for builders to play around and fool the public of these states with varied forms of floor area calculations. If we see flats constructed in Gurgaon in early 2000, we will find within the FAR of 1.75 the area sold to home buyers is less dense and more open, where as today, though the FAR is unchanged the flats have become smaller and the open spaces have shrunk considerably. Where is the area disappearing when the quotient still remains the same. who is eating up all the area which was previously in plenty??? The answers to these growing concerns are to be found at the office of Director General, Town & Country Planning Haryana or with the CEO Noida Authority or any other authority that is regulating and sanctioning the lay-out plans of the Builders.

We have to remember that land is a very precious asset, like so many other natural resources and therefore it is only natural in a country like ours, where systems fail to deliver; that land owners/builders would leave no stone upturned to maximize their return by selling and constructing areas well above the FAR in connivance with the authorities, who are more then willing to turn a blind eye to this growing menace, for a packet that gets delivered to their accounts in chilly hills of Switzerland.

SUPER AREA-- A MYTH

In the last topic we scrutinized the term "Pre-Launch" and then The Builder Buyer Agreement. In the series to reveal the meaning of various jargon's used in the Indian Real Estate, we would today take a look at the meaning of "SUPER AREA". What is Super Area. Does it have any meaning in the eyes of the law makers, Do Competent Authorities define Super Area, who calculates this Area and for what reason, lastly why there is a need for a term like Super Area??

SUPER AREA- A MYTH

Before we try to understand any thing about this word, let me assure you that nowhere in the world-any property is sold on Super Area. This is an indigenous phenomena, fabricated by Indian Builders to gain exponentially by selling an area that does not exist. To create confusion they have created a definition that does not find any mention anywhere else in the world but only in our Indian context it has relevance. The definition propagated says that SUPER AREA = COMMON AREA +  BUILD UP/COVERED AREA.

To the RTI filed to Noida Authority, Ghaziabad Development Authority and Directorate Town & Country Planning, Haryana to provide the definition of Super Area. The reply received were similar, "That the department has no such information on Super Area".

That means that the regulatory body which is essentially granting the builders the plans to construct the group housing projects are not even aware of the term Super Area. The Bureau of Indian Standards, the agency which defines the weight, measurement etc of the products in India also does not define the Super Area for buildings. Yes, they have definition for Build-up area, Carpet area etc. So how do we find out the definition for super area.

The fact is that there is no way to find it out. A case investigated in Haryana, where the builder has 28.433 Acres of land, the permissible construction allowed by the DTCP according to the plans passed was 17.70 lakh sq. ft. where as the area charged by the builder to its allottees was 23 lakh Sq. Ft. Amost 5.29 lakh Sq. ft. over and above the prescribed limit. which is almost 30% of the approved area...maybe that is why they call it SUPER AREA as it is neither on the ground nor in the air..it is Nowhere.

Lets see this using another method of calculation, the total land area is 28.433 acres that means it is 115064 Sq. Mtrs. on this land the Builder is constructing almost 1695 flats of two types (Two Bedroom and three bedroom) the total area of which is approx 23 lakh Sq. Ft. which is equal to 2,13,754 Sq. Mtrs. The FAR used by the Builder is only 1.43, so the sanctions of plans for all construction in the said land can only be for 1,64,542 Sq. Mtrs. which means the area over the area of construction sold to the consumers is approx 49,212 Sq. Mtrs or almost 12 acres on a 28.433 Acre land. Wonderful, now please access the amounts he has made selling this additional area, it is a whopping Rs. 71,48,53,512/- only. The total land costed approx Rs. 11 Crore and the total project's construction cost was approx Rs. 141.63 Crore, therefore for a project which costed a total of Rs. 153 Crore the Builder has made half of it just by selling an unknown area. WOW!! Now we know why Businessmen across different industries are wanting to have their own real estate company and why Builders need Super Area....naturally that is why, even the Finance analyst say that Private Real Estate Companies are non-transparent, even they get goose pimples trying to understand their balance sheet, as every thing is skewed.

That is why Super Area exists in India, so that Builders can loot without providing any calculations for this Super Area, knowing pretty well that the Consumer would not be able to find this area in any of the Competent Authorities Books. Sadly it is not the builder alone who enjoys and makes profit on selling this non-existent area its also the Revenue department that gains, as they register the flat on Super Area. The reason prescribed by the Revenue secretary is that they register the flat on the plan submitted by the Builder and as the flat is sold on Super Area it is therefore duly registered on the same.

Stupid Argument. Plots are registered on Actual Size of the plot, why not on super area of the plot. Plots are not registered on the permissible Construable area or the Super Area of the Construction beyond the FAR, as is the case in Group Housing. True that all construction on the plot is in ownership of the landowner, so its easy to register the Area of the plot in one/ two name. But the plot holder also enjoys common areas of the said Plotted Colony, similarly as the buyer of a flat in group Housing. The builder constructs parks, club etc in plotted colony too. But why this area is not included, the Builders say it is not done, as the said consideration of all common Areas is inbuilt in the cost of the Plot on actual size.

Similarly when one buys a flat in a group Housing colony then the Cost of the land, construction other common areas & facilities is inbuilt in the cost of the flat, so why should the builder be allowed to charge the same again for a non existent Area and the Registrar coolly register it. The builder knows all the costs of the plant, Machinery, lifts, sewerage treatment plants, rain water harvesting, water tanks, guard rooms, toilets, EWS, Service Apartment etc that he would build within the group housing, the Cost of which he duly assign's to each flat proportionately to arrive at the cost of the flat in the project. That is how the Per Square Feet is determined. Therefore when all area and its construction is already computed within the cost of the flat, then it is criminal to add some excess non existent areas at BSP rates and justify the same as Super Area.

It is also often seen that at advance stage of Construction the Super Area of the flat is increased by the builder, without any increase of the Acreage of the plot. which also indicates that there is no term as Super Area, as by their own definition the Super Area= Build Up Area + Common Area, so if this is true than with any increase in Build Up Area, the Common Area would in direct proportion decrease, if the land acreage of the said colony does not increase. That means that when builder increases the Super Area of the flat without proportionate increase in the Acreage of the land, he is not considering the effect of decrease in common area. Therefore it is easy to establish that the Super Area is not what the Builder wishes us to believe as the Common Area or Build Up Area do not have any impact on its computation, it is just a lie that has been fed to the citizens of the nation and since has been accepted by our people as preamble.

The Government has to look into this very very diligently and make sure that this loot is stopped immediately. Various RWA's and RTI activists are consistently in touch with the Ministry of Urban Planning & Development to get relevant changes in the prospective legislation's which would ban sales or registry of flats on Super Area. Hope very soon, the desired changes are made and Super Area becomes a non-entity.

BUILDER BUYERS AGREEMENT- IN HARYANA

Dear Friends,

This is in continuation of  understanding the Jargon's used in Real Estate Industry. One of which is the Builder-Buyer Agreement. In essence the Builder Buyer Agreement is a Contract between the Builder to provide services as specified for a consideration and the Buyer for fulfilling his end of the promise to pay for the services rendered by the Builder as promised and accepted by the Buyer. Ideally the Agreement should be made available to the Buyer at the time of booking of the said property but in Haryana this good practice is not adopted by any of the Builders, the main reason for this is that 100% of the times the property on sale is on Pre-Launch, therefore the Builder can not get into any legal contract with its Buyers.This acts to the detriment to the interest of the Buyer, as often, at the time of booking the sales staff of the Builder assures that the said project would be complete within 30 months of 36 months, but when the Builder finally proposes the Agreement to the Buyer, already 1 or 2 years have gone by and thus the dream home remains a distant dream for which the Buyer is compelled to pay extra costs in terms of increased cost of material, Govt. Taxes, enhanced EDC etc.

At the time when the Builder finally proposes the agreement to the Buyer, the Buyers generally do not go through the clauses of the agreement which form the basis not only of the way the transaction between the two parties would be concluded but also which defines the character of the ownership of the Buyers in the said residential colony. Thereby, surrendering all rights and interest in favor of the Builder even before a brick is laid in the project. That is why it is most important to go through the agreement carefully or by taking assistance of a lawyer. A small amount of professional charges of the lawyer would help you save the lakhs of hard earned rupees that you have agreed to pay for availing services from the Builder.

A typical Builder Buyer Agreement Should be one, which safeguards the  interest and title of all the parties to the agreement. It should be balanced and not favoring any one party or putting onus on only one party to comply with terms and conditions and sparing the other from any contractual obligations, it should be equitable, transparent and enforceable by law. Since we are discussing only the Builder Buyer Agreements for properties in Haryana, the Agreement should further be consistent with provisions of the Haryana Apartment Ownership Act, 1983, Haryana Development and Regulations of Urban Areas Act, 1975 and rules framed therein and the Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act, 1963 and rules framed therein. These Acts provide for all necessary sanctions and
 permissions the Builder needs to construct the group Housing Colony or Plotted Colony. These Acts define the Population Density per acre for each category of urban estate of Haryana, according to which the Builder can present his plan for approval from the Competent Authority, which is the DTCP. The Apartment Ownership Act defines all Common Areas and facilities and the rights and liabilities of the owners of the colony. Therefore the Builder Buyer Agreement should be Consistent with these Acts and Rules that govern the urban development in the state of Haryana.

Most of the Builder Buyer Agreement Prepared and presented by the Builders to the Buyers are Void Contracts as they are heavily loaded in favor of the Builder and against the Buyers. They do not give ownership rights of all the common areas and facilities, they are inconsistent with the prevailing laws and provisions. For example a case where the Builder says that In a group Housing Project the area of the dwelling unit sold is tentative and could increase by 10% or more and for which increase in area the Buyer would be liable to pay at the present BSP or on the Rate in future. This clause in not enforceable by Law. As in Haryana, the maximum a Builder can build over the approved plan is only 5% for group Housing and 10% for plotted colony. Therefore when the Competent Authority does not allow any increase in area beyond 5% then to make the Buyer agree on an increase in area beyond which the law of the land does not sanction is unlawful. The reason why the Builder chooses to put this clause is that at the stage of presenting the Agreement to the Buyers, its plan are still not approved and it fully knows that the size of the apartment it is going to get approved would be more than 10% of the area sold to Buyers 1 or 2 years back. The Builder sold the apartments at a ticket size which would lure middle class people to buy into his project. Once it is all sold and the Builder has collected 25 to 40% (in some cases the Builders before executing the agreement have even taken 50% from the Buyers) it becomes easier for the Builder to dictate its terms which are only aimed at gaining exponentially at the cost of the allottee. Hence such clauses are suppressio veri and the Buyer should be weary to sign the dotted lines, where such clauses are a part of the Agreement.

In most Agreements the terms of payment are also skewed in favor of the Builder. Lets take an example where the Buyers of a project have paid 30% to the Builder before executing the agreement, the rest 65% is demanded by the Builder after executing the agreement therefore binding the Buyer Contractually to pay by the end of internal  or external plastering of the said flat  or by the time of laying of the roof slab. Which means that Builder would pocket 95% payment with respect to the said unit while the work executed by such time would not be even 60% on the project. it is important to understand that the Buyer is being charged at Super Area, therefore it means that when the Buyer has paid 95% of the payment the Builder should have completed 95% of the construction and development work at the site.  Therefore such type of payments plans that help the Builder to amass 95% payment without proportionate work on the site, favor the Builder and are against the interest of the Buyer. The Buyer should insist that the Builder should  have a payment plan that reflects the work done on the whole of the project after all the Buyer is not buying four walls of the apartment but paying for other areas within the project as well. Such a plan would be beneficial not only cause the cost paid by the Buyer is reflecting the true work done on site but also will  help in timely execution of the project with all facilities by the time possession is offered and balance 5% is demanded.

Another Financial Implication could be the Delay Clause. The parties in the contract should be on the same level field. If the consumer delays in fulfilling its part of the contract then he should be charged at the same rate at which the Builder when he defaults in meeting the possession date. It has been observed that generally the industry practice is to charge 18% to 24% for delay in payment by Buyers but when it comes to paying for delay in Possession the Builders agree to pay only Rs. 5 per sq. ft. which is totally one sided and hence should not be agreed by the Buyers.

Often the Builders put the onus on Buyers,of knowing all relevant documents, title deeds,sanction plans etc  of the project. Even when the Builder has never shown them even a single document with regards of any approval or sanction of the project. Buyers should be averse to signing such clauses. These have serious consequences at a later stage when after years the Buyers get to know the plans shown in the Brochure etc were not the plans approved by the Builder but a totally different plan was presented for sanctioning by the authority. Buyers have to realize that purchasing a home is one of the biggest transaction in a persons life, to sign an agreement without going through it thoroughly would result in grave consequences. A person paying lakhs of rupees for the property has every right to get copies of all relevant papers that the Builder is saying in his agreement the Buyer has already satisfied himself with. These papers should be the Land ownership papers of the Builder of the said land on which the project is coming up, the license of the colony to be developed, The LC-IV (A) in case of group Housing projects and LC-IV(B) in case of plotted development, The copies of clearances from the Ministry of environment and forests, Commencement of Construction work BR-III, sanctioned lay-out plan of the colony, etc. These papers are a must for each Buyer to get, even if it means paying an additional Rs. 500/- for a set of copies to the Builder. If the Builder is not providing these then the Buyers should be aware that even while getting the Agreement executed the Builder is willfully deceiving the Buyers.

The list of what should be an Ideal Agreement is long as is the case with any such draft which is usually of about 30 odd pages. So for sake of brevity only a few points have been elaborated upon here which I feel should take care of creating awareness about the subject. One Final aspect of the Agreement should be, an even and equitable exist plan for the Buyer. In most cases the Builders put such clauses where the onus of Builder of not providing the promised facility is shifted on to the Buyer and therefore the Buyer is stuck into paying further installments even if the Buyer wants to withdraw from the scheme as the clause of forfeiture of earnest amount and further clause of Builder cancelling the unit at its own discretion acts as a detriment to allow the Buyer save and secure exit. Therefore it is very important that the Agreement should not allow such clauses which would empower the Builder at the cost of the Buyer and the Buyers either collectively or separately ( with the help of a lawyer) should go through the entire agreement in its completeness and  make all efforts to have only such clauses in it, which put the Buyers at the same level as that of the Builder and enjoy same rights and liabilities so that no clause is prejudicial to either party and both parties rights are protected and the responsibility defined in clearest of manner.

Acts:-
The Haryana Apartment Ownership Act, 1983...http://tcpharyana.gov.in/CIM/HaryanaApartmentOwnershipActRules1983.htm

The Haryana Development & Regulations of Urban Areas Act, 1975
http://tcpharyana.gov.in/CIM/HaryanaDevelopmentAndRegu.htm

The Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act, 1963
http://tcpharyana.gov.in/CIM/PunjabRoadsAndControlledAreasAct.htm