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Air Force Naval Zee Farms Welfare Association AFNZFWA Through its President v/s Air Force Naval Housing Board & Another

    Consumer Case No. 307 of 2002

    Decided On, 06 August 2015

    At, National Consumer Disputes Redressal Commission NCDRC

    By, MEMBER

    For the Complainant: J. Kumar, Wg.Cdr. (Retd.) Authorised Representative. For the Opposite Parties: R.K. Handoo, Advocate With B.S. Nirola, Assistant Director (Legal) AFNHB.

Judgment Text

J.M. Malik, Presiding Member

1. Air Force Naval Zee Farms Welfare Association (Regd.) (in short, AFNZFWA) through its President, has filed this complaint against the Air Force Naval Housing Board (Regd.) –OP-1, through its Chairman and Air Force Naval Housing Board (Regd.), OP-2, through its Director General. The key function of OP1 and OP2 is to carry out survey, allot and deliver houses/flats/farm units under various Self Financing Schemes, on All-India basis, to entitled personnel of Indian Navy/Indian Air Force, both regular and retired (including spouses of the deceased). They represent ‘no profit, no loss’ society, registered under Societies Act 1860.

2. In the year 1994-95, OPs- 1 & 2 conceived a one acre farm unit scheme and carried out a demand survey at a prescribed administrative fee. On 05.12.1995, the Developer gave a written offer to OP-2 for a fertile land of 300 to 600 acres, extendable to 1000 acres with underground sweet water sans local interference and agriculture loss with completion time of construction of 300, one acre farm units with infrastructure and community facilities, within a year, near Nuh, District Gurgaon, without indicating the exact location. Based on the Developer’s offer, OP No. 2 issued a letter of intent dated 13.12.1995, indicating the detailed scope of work, specifications and the stage-wise construction of 300, one acre farm units with the above said facility.

3. Vide its letter dated 12.01.1996, OP-2 opened the above said farm units scheme for registration to the allottees, with many salient features, viz., tentative cost per farm unit at Rs.5.8 lacs, to pay Rs.1.20 lacs as first instalment definitely by 09.02.1996 and another Rs.1.20 lacs upto 09.04.1996 at differential rates of interest @ 14%, 16% and thereafter @ 18%. It was also stipulated that, in case of withdrawal from the Scheme after registration of land on individual allottees name, OP-2 will impose a penalty of administrative expenses of Rs.20,000/- plus cost of stamp duty, registration and mutation charges etc. The construction of all 300 farm units with all the facilities and thereafter possession was to be handed over by June, 1997.

4. On 04.05.1996, OP-2 entered into a detailed agreement with Developers with supplementary agreement dated 29.07.1998 and 21.01.1999 spelling out detailed scope of work, specification and the sequential procedure in stages for construction. It was agreed that the total amount to be paid by OP-2 to Developers, will be Rs.5.56 lacs with no escalation of costs, whatsoever. Again, all the 300 farm units were to be contigu

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us and interlinked with roads. Date of completion of construction of 300 farm units complex with all infrastructure and community facilities will be 20 months from the date of signing of the agreement. It was emphasized that the time was the essence of the contract.5. The Complaint has also mentioned about the water, electricity, defects in the premises but at the time of arguments, the complainant did not press the same. However, it is alleged that on 03.10.1996, OP-2 informed the allottees that progress of acquisition of land was unsatisfactory. They were informed that only 160 farm units against 300 are expected to be constructed and that too, not in contiguity. Offer to withdraw from the Scheme was also given. On 11.07.1997, the OP2 asked the allottees to remit an adhoc amount of Rs.50,000/-, latest by 09.09.1997. On 16.01.1998, OP2 intimated that the number of farm units has been reduced to 110 due to the delay in the acquisition of land and it was apprehended that the contractors / Developers would not be able to execute the construction work, in time and asked the allottees to either continue with the present contractors or continue with new contractors. They were also informed that construction cost of the component with the present as well as new contractors upto December, 1999 would be Rs.3.7 lakhs and 4.4 lakhs. On 02.06.1998, the allottees were informed that the construction would remain entrusted to the present contractors and intimated revised payment schedule.6. On 17.07.1998, OP2 the complainants were informed that the cost of the unit would be Rs.6.8 lakhs. On 27.11.1998, OP2 intimated that the land for 102 against 108 farm units could be acquired. On 23.05.2000, OP2 informed the complainants that the work on 84 farm units is expected to be completed by August, 2000 and remaining 21 farm units by February, 2001. On 30.08.2000, second notice dated was issued for constitution of a society/an association for meeting of the allottees of farm units. On 01.10.2000, Association of the allottees was formed with the election of the office bearers in the second meeting. On 18.01.2001, OP2 issued letter to the complainants of farm units 1 to 84 for handing over / taking over by 14.04.2001, failing which, an overhead charge of Rs.50/- per day would be levied as watch and ward charges thereafter. On 12.02.2001, the complainant asked for a deferment of handing over the farm units as the community facilities were not yet complete and the pumping capacity of the 1 HP Jet Pump Motor was not adequate for irrigation of one acre of land as there was delay of about four years. Thereafter, correspondence went on between the parties for a long time wherein the issues regarding water, electricity and defects were mentioned.7. On 04.09.2001, the complainant sent a legal notice to OP1. On 07.09.2001, the complainant intimated the OP2 regarding receipt of show-cause notices by the allottees from District Town Planner Enforcement, Gurgaon, objecting to the construction of buildings in the farm units. As per the agreement, the farm units were to be handed over to the complainant unencumbered, the sale deed of land on allottees was to be executed only after obtaining NOCs. Ultimately, this complaint was filed on 23.08.2002, with the following prayers :-“A. OP2 to give an option immediately without costs (including the unauthorized electricity bill amount) to the allottees, to withdraw from the farm unit project, refunding the entire amount paid by them together with a rate of interest @ 18% p.a. on the installments / adhoc payments / penalties charged from them from dates of their payment upto the date of refund.B. Refund the arbitrary enhanced amount of Rs.1.00 lakh (Rs. 5.8 lakhs to Rs.6.8 lakhs) to all the allottees together with 18% interest, from the date of actual date (s) of payment by the allottees to the actual date of refund.C. Compensate all allottees for an amount of Rs.1.00 lakh per individual for the mental agony, harassment and loss of opportunity costs due to the uncertainties caused by the slippage of the completion of the project from August, 1997 onwards with no end in sight.D. In case of those allottees willing to take over their farm with the completion of the infrastructural and community facilities as an uncompleted, OP2 :i) to pay 18% interest on all the installments from the date of payment upto the actual date of handing over / taking over or the actual date of refund, whichever is later.ii) to pay 18% interest on the penalties charged if any on delayed payments from the date (s) of payment ot the actual date of refund.iii) compensate each allottees an amount of Rs. 1.00 lakh due to the acquisition of non-contiguous land (without prior approval of the site plan), infringing privacy and naturality of community neighbourhood of the allottees of the farm unit complex.iv) compensate for augmenting pumping capacity of water by additional installation of higher capacity motor as required to irrigate their respective farm unit land, to remove any deficiency on account of defective fencing and levelling of land within 15 days of the submission of the requisite bills are alternatively remove all the defects / deficiencies before handing over / taking over.v) compensate each allottees an amount of Rs.10,000/- per annum from the date of payment of Rs.2.4 lakhs for acquisition of land to the date of handing over / taking or actual date of refund for loss of agricultural accruals.vi) compensate for an amount of Rs. 1.00 lakh per farm unit on account acquiring unproductive barren land plots.vii) compensate for an amount of Rs.2.00 lakhs for environmental and ecological losses due to absence of landscaping and greening of the farm unit complex with growing of trees.viii) settlement or compensation for the actual electricity bills of the allottees by OP2 at his own cost upto the date of handing over / taking over of the farm units, by taking actual electricity meter readings.ix) compensate for legal expenses of Rs.20,000/-x) Grant any other relief as deemed fit and proper”.8. The OPs 1 & 2 have enumerated the following defences in their written version. They are a welfare organization working on “no profit, no loss” basis, devoted to the construction of dwelling units for the Air Force and Naval personnel. The Board has no funds, of its own and has no property of its own. The jurisdiction of this Commission has been called into question, as they objected that the complainant is not a ‘consumer’. It is admitted that the project was not complete in time, as there was increase in estimate costs from Rs.5.68 lakhs to Rs.6.8 lakhs. The complainants were asked to take possession. The complainants did not take the same on account of alleged non-completion of other infrastructure or facilities. The OPs imposed penal cost. It is averred that because of the defects in the project, as back as on 16.01.1998, the OPs have sought views from the allottees, meetings were held and vide letters dated 16.01.1998 and 02.06.1998, the reasons were communicated to the complainants. The cost intimated initially was absolutely tentative as is clear from the communication dated 12.01.1996. Subsequently, increase in cost was intimated as such, it cannot be said that the cost was increased, illegally.9. Again, the allottees were asked to take the possession. They were assured that the alleged defects would come to the fore and contractor being bound within period of contract, would be able to rectify all the defects without saddling any additional costs. The penal interest was never enforced. Again, during the progress of the project, the OPs’ Board found certain areas unviable for the project for which decision was to be taken for modifying the project and the location of the community centre in the project was also got relocated. There have been instances where certain allottees in different projects of the Board, after the fall of the property prices, opted for withdrawal of mass scale and the OP Board had to revise its regulations for withdrawal, imposing heavy penal conditions so that the genuine allottees in the Scheme do not suffer as any withdrawal of money from the project which are committed to the various contractors in the project leads to the delay, closure of the project and litigation for the OPs.10. After having heard the parties to a great length and after mulling over the record, our findings run as follows. Wing Cmdr. J. Kumar, Authorised Representative of the complainants did not pick up a conflict with so many issues involved herein with. It is obvious that enough time has elapsed and most of the deficiencies have been removed. Sh. J. Kumar, vehemently argued that it is an indisputable fact that the OPs have constructed the farm units in a haphazard manner. He pointed out that the OPs have failed to honour their commitment in respect of their promise that all the 300 farm units would be contiguous and interlinked with roads. First of all, 300 farm units were not being provided. The OPs have tried to explain that they could not acquire the land meant for 300 farm units. He also added that it had come down to 106 farm units.11. CHILDREN’S PARK :This is an indisputable fact that the OPs were to provide children’s park, measuring one acre. The OPs have displayed their inability to provide that park. He further argued that OPs have tried to provide the park in two pieces of land which are separately situated and are not adjacent to the above said farm units, hence, the complainants did not commit any mistake by rejecting the same. It does not fulfill their purpose. The OPs are ready to provide another children’s park, measuring one acre, somewhere else, for which, the complainants are not ready to accept the same. Another offer was made by the OPs that they are ready to pay a sum of Rs.45.00 lakhs, the value of the said piece of land. However, the complainants insisted that they cannot get the said land for a paltry amount of Rs.45 lakhs. He further submitted that the whole idea of having farm unit and a children’s park at one place, has been dashed to the ground.12. The arguments urged by Sh. J. Kumar, the Authorised Representative of the complainants, carry infinite value and are incontrovertible. It has caused harassment, mental agony, anger, sadness, anguish, frustration, etc., to the complainants. The value of the entire scheme evanesces. It has reduced the entire scheme to a ‘blue sky idea‘, i.e., impractical and fanciful. The people are already exasperated with senseless delay and deficiency. By no stretch of imagination, it can be said that a sum of Rs.45.00 lakhs would be enough for the said purpose. We, therefore, enhance the sum to Rs.50.00 lakhs, which be paid by the OPs 1 & 2, to the complainants, with interest @ 8% p.a., from 18.01.2001, till realisation.13. ESCALATED PRICE:The second submission made by the Authorised Representative of the complainant was that the amount was illegally enhanced. Letter dated 12.01.1996, titled “Intimation : Jal Vayu Farms Scheme” mentions the tentative cost as Rs.5.8 lakhs. On 27.11.1998, a supplementary Agreement was signed by the OPs with the Promoters. It was explained that the Promoters were to commence construction of dwelling units in July, 1998 but due to heavy unseasonal rains, the needful could not be done. Previously, the OPs have given the option to the allottees that they could withdraw from the said Scheme. The Authorised Representative of the complainants invited our attention towards the Letter of Intent dated 13.12.1995, titled “Jalvayu Farms Scheme of AFNHB in Gurgaon region”/ agreement entered into between the OPs and their Promoter. The relevant portion reads as under :-“5.2 The total cost of a fully developed farm unit including development of common area, amenities is stated in paragraph 5.1 above and in the work contract will be Rs.5.56 lacs per acre of full development. No escalations in cost towards material, labour and any other expenditure will be paid to you”.The plea set up by the Authorised Representative was that the complainants are themselves paying the price in the sum of Rs.5.56 lakhs, so it does not behoove on the part of OPs to charge the escalated price from them.14. All these arguments carry no conviction. First of all, the complainants agreed to pay the enhanced price. The price written in the agreement was tentative. The Minutes of Meeting held in the Chairman’s Office on 17.12.2002 clearly mentions that the escalation of about Rs.60,000/- has taken place on account of additional facilities provided to the allottees based on allottees inputs. It is also apparent that the OPs had to face a number of difficulties before acquiring the land. They were not sure, whether, they would get the whole land or half of the land. Further, at Para No. 9 of the letter dated 12.01.1996, it is mentioned clearly, specifically and unequivocally, that “the Board reserves its right to claim additional charges from the allottee before handing over of the farm unit, in case the area during its development by the Board is declared as a ’controlled area’ by the appropriate authorities of the state and / or as a consequence of such development, any levy, charges, fee or cess may be required to be paid by the Board on behalf of the allottees as per State Laws and regulations. Board shall also not be held responsible in case the land under development is acquired by the State Government for public purpose under the Land Acquisition Act. In such an eventuality, only those allottees in whose names the land has been registered shall be entitled to receive such compensation as adjudicated by the appropriate authorities under the Land Acquisition Act. You shall also be bound by all such terms and conditions, covenants, notifications and stipulations which shall be made by the Board and State Government, from time to time, printed and published in State Gazettee, Newspapers, Circulars, Signals and letters, including Board’s “News Letters. In para 10, it mentions that allottees should intimate their unconditional acceptance of the aforesaid terms and conditions in writing, along with the requisite documents, as mentioned above”.15. It must be borne in mind that the complainants have undertaken unconditionally to abide by the terms and conditions by way of affidavit. The OPs have cited an authority titled Chief Administrator, PUDA Vs. Shabnam Virk, 2006 (4) SCC 74, wherein it was held that, where, costs intimated are tentative and the respondents have accepted the terms and conditions unconditionally, then, the consumer cannot complain of higher amount, demanded. In the Questionnaire – Farm Unit Allottees put before the AFNHM, Air Force Station, Race Course Road, New Delhi, the details of changes proposed by the allottees during the Adhoc Users’ Committee Meeting, held on 17.06.1998, were detailed.16. One of the allottees gave an undertaking, marked as Appendix-C, the relevant portion of which runs as follows :-“The tentative cost of this Farm Unit is Rs. 5.80 lacs and the final cost will be worked out by the Board on completion of this Farm Unit Project. I have read and understood the broad terms and conditions of allotment and development of the farm unit as set out in your letter of allotment No. AFNHB/ADM/ GURO451/Dated 12 JAN, ’96, which I accept to abide”.17. DELAY :The third submission made by the complainant is that there was huge delay in delivering the premises, in question, to the complainants. It must be borne in mind that after the amendments in the C.P.Act, 1986, dated 15.03.2003, such like complaints are not even maintainable. The complainants have got houses in Delhi, itself. They have got this extra farm unit. After the amendment, they will not be considered to be “consumers”. Undoubtedly, there is delay in putting the allottees in possession of the premises in dispute. It appears that the OPs are trying to lead the gullible persons, up the garden path. They have made a vain attempt in making bricks without straw. Unless and until they have acquired the land, they should not have floated the above said Scheme. They could not acquire the land, within time. They should not have taken the consumers, for a ride. The whole idea of making an agricultural land of 300 farm units, in one acre land, has vanished into the thin air. It is also clear that the OPs deliberately, did not appoint experienced Constructors on the spot. The admission of this fact comes out from the horse’s mouth itself. In their letter dated, 29.06.2001, the OPs’ own submission, runs as follows :-“a) Slippage in Original PDC : No doubt the original PDC of the above turnkey project was Aug’97, but due to cumbersome / tedious procedures involved in acquiring land, the process of land acquisition continued till end ’98. Since these promoters did not have much construction experience, opinions from allottees were sought vide letter AFNHB/ADM/610-11 dated 16.01.1998, whether, AFNHB should continue with these developers or look afresh. In the same letter, it was informed that there is likelihood of slippage of PDC”.18. Further, in para 8 of the letter dated 12.01.1996, it is mentioned that the “likely date of completion of the farm units and the community facilities is June, 1997, whereinafter the farm units shall be handed over to the allottees”.19. Again, the relevant portions of the letter dated 03.10.1996, with the Heading “Status Report : Jal Vayu Farms Scheme At Site ‘Z’, written by the OPs to one of the allottees, are, as under :-“3. Besides being slow as stated above, the Promoters have also expressed their difficulties to meet the total target of developing 300 farm Units in contiguity. Under the present situation, the Promoters are optimistic to develop about 160 farm units only and those too, not in complete contiguity.7. It is further informed that the AFNHB is making all possible efforts to acquire additional farm land to accommodate maximum number for allotment of farm units. This additional farm land may even be situated at a different location, and the tentative cost of a farm unit may therefore be higher than the one offered earlier. You may, therefore, consider withdrawal from the Scheme, accordingly”.However, when the work was almost complete, vide letter dated 21.01.2003, the allottees were not permitted to withdraw from the Scheme.20. STAMP DUTY :Further delay was caused because the stamp duty has not been paid which is included in the Sale price. In the document “Scope of Work”, under the heading Stage-II, with sub-heading “Land Acquisition /procurement, its transfer & mutation, security of land, payment of land acquisition advance and its recovery by AFNHB, entered into between the OP and their Promoters, it was mentioned as under :-“4.4 You will arrange execution of sale deeds for plots of one acre each directly in favour of allottees, in phases, whose names shall be provided to you by AFNHB. Prior to execution of sale Deeds of plots of one acre each, the promoters will produce the required ‘No Objection Certificate’ for their respective sites should be comprehensive covering all aspects. The sale deeds of Farm Units will have to be executed at the appropriate tehsils in the State of Haryana. All expenses on account of stamp duty, registration and mutation charges etc. for transferring the land will be borne by you. Minimum of 80 sale deeds per month will be executed. Execution of sale deeds for the entire land, i.e. 300 acres at your site will have to be completed within 16 weeks from signing of the contract agreement. Immediately after registration of the land you will arrange for mutation of each plot in favour of the allottees of the Board in the records of the office of the Competent Authority. All expenses incurred in obtaining mutation of land in favor of the allottees will be borne by you”.21. PRICE OF CULTIVATION :In the same document, i.e., “Scope of Work”, under the Heading “Stage-III, with sub-heading “5. Broad Specifications of the project units / common area, mobilization advance for procurement of material, etc., and recovery by AFNHB, entered into between the OPs and their Promoters, it was mentioned at Sub-clause 5.1 (o), as under :-“(o) Cultivation of Land:The promoter will arrange cultivation of land at site during the period of development of Farm Unit Projects. Fifty per cent of the yield will be handed over to the AFNHB”.Thus, it is clear that no 50% of the yield was ever handed over to the AFNHB.22. WHO IS LIABLE ?:The Article of Agreement, dated 04.05.1996, entered into between the OPs and M/s. Venture India, it was mentioned, as under :-“10. If the Developer fails to comply with any of the obligation mentioned above, winds-up his business, be dissolved, or otherwise fails or neglects to complete the said work within the stipulated period, then or on the happening of any such event, the Board shall be entitled to cancel this contract and to get the unfinished work done at risk and cost of the Developer by the third party. If the Board suffers any loss in this regard the Developer shall reimburse the Board for the same. Viz., payment or reimbursement of such losses the decision of the said Board with regard to the quantum of loss will be final and binding on parties hereto. Upon such termination of the contract the Developer shall refund any over payment made by the Board”.It must be borne in mind that there is a privity of contract between the promoters and the OPs. The Promoters have nothing to do with the complainants. Consequently, the OPs are vicariously liable for getting the needful done from the Promoters.23. In the result, we allow the complaint and direct, as under :1) The OPs 1 & 2 are directed to pay to the complainants, a sum of Rs.50.00 lakhs, towards children’s park, with interest @ 8% p.a., from 18.01.2001, till its realization;2) The OPs 1 & 2 will get the sale deeds executed in favour of the allottees, either by themselves or through the promoters, within a period of 90 days’ from the date of receipt of copy of this order, failing which, they will have to pay a penalty in the sum of Rs.500/- per day, to each of the allottees, till the needful is done;3) The OPs 1 & 2 will further pay costs to the complainants, for the delay caused, in the sum of Rs.15,000/- to each allotteee, within a period of 90 days’ from the date of receipt of copy of this order, failing which, it will carry interest @ 9% p.a., till its realization; and4) The complainants have claimed a sum of Rs.10,000/- per year, for cultivation of land. This Agreement was entered into between the parties, on 13.12.1995. Consequently, the OPs 1 & 2 will pay Rs.10,000/- per year, to the complainant, from 1995 to 2001 (total being Rs.60,000/- only), with interest @ 9% p.a. w.e.f. the respective years, till its realization.24. OP3 is only a proforma party. No grievance against OP3 has been made out. Hence, the complaint against it is dismissed.

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