DRS-87 APPLICANTS, ASSOCIATION vs CITY INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD.

THE Complainant Association is a voluntary organisation, as alleged in the complaint, representing the grievances of its members in respect of alleged deficiency in service and unfair trade practices adopted by the Opposite Party-City and Industrial Development Corporation of Maharashtra Ltd, (for short CIDCO). Each member of the association on whose behalf of the present complaint is filed is a consumer of the services rendered by the Opposite Party. Each of these persons had opted for outright purchase of the tenements to be constructed by the Opposite Party. In June, 1987, the Opposite Party carried out a survey for finding out the demand for tenements in New Bombay. For this purpose press advertisements were issued and also brought out a bookelt called "Demand Registratin Survey for Tenements in Seven Townships in New Bombay". The said bookelt gave information about the types of tenements, tentative prices etc. From the said bookelt, the prospective applicants were given to understand that the booking of the tenement according to the area /size had a direct nexus with the income the applicant earned. It was, therefore, implied that the prices indicated by the Opposite Party would be subjected only to a marginal variation. Keeping this factor in mind, people budgeted their investment in the tenement and registered their demand for the same by paying the registration charges specified in the said booklet. The closing date for receiving applications was 10th July, 1987 which was extended to 17th July, 1987. Although by the end of July 1987, the Opposite Party had all the data ayailable with it, the Opposite Party slept over the matter, thereby displaying utter negligence. In February, 1990, the Opposite Party issued a press advertisement to reassure prospective allottees that part of the construction work had already commenced from October, 1989 and tender for the construction of more tenements would be finalized by April, 1990. The said advertisement further stated that the construction of houses would be completed within a period of two years, i.e. the construction of those houses which commenced in 1989 would be completed by December, 1991, while the remaining houses would be completed by April, 1992. In September-October, 1990, the Opposite Party issued letters to those applicants who were selected for allotment of tenements. In those letters, the price of the tenement has been given and the area/size of the tenement has been indicated. However, the location is not mentioned. Along with the said letter, another letter was sent. This letter clarified that the allotment is subject to fulfillment of the income eligibility criteria declared by the Opposite Party in 1987. The letter further clarified that the price may escalate further by about 10%. For those persons who may be allotted tenements in Vashi-Sanpada, the price may be hiked by a further 5% to 10% as premium for these locations. A reading of the above two letters shows that the price fixed in September-October 1990 becomes the basis of the contract. The prices for the various areas /sizes would also show that the Opposite Party has hiked the per square metre price between the date of registration and the date of allotment. The quantum of the hike ranges from 30% to 64%. The maximum hike of 64% applies to 18 square metre tenements, which tenements are meant for the poorest Section of the applicants. The said letter m issued in September-October 1990further stated that payment would have to be made in eight instalments and stipulated she due dates for payment of the instalments, the said letter stated "Your registration amount along with the interest will be adjusted in the last instalment, before handing possession of the tenement". The letter further stated that the eighth and last instalment was to be paid by 29th June, 1992, the due date. This letter implies that the Opposite Party was to hand over possession of the tenement by the end of June 1992. However, the Opposite Party deliberately and wilfully failed to enter into an agreement with each allottee as required per Section of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Managment and Transfer) Act, 1963, which casts a mandatory obligation on the builder to disclose the price and the date of possession, and to enter into an agreement with the purchaser of the tenement. The failure on the part of the Opposite Party to observe the procedures laid down under the Maharashtra Ownership Flats Act constitutes a deficiency in service and an unfair trade practice as defined under the Consumer Protection Act, 1986. Around September-October, 1991, the Opposite Party wrote to the allottees informing them about the location where they were allotted the tenements. Many allottees were given tenements at locations different to the three, locations in order of preference listed by them in their application. However, by this time the Complainants had already paid the fourth instalment out of the eight instalments, therefore, they had no choice but to represent to the Opposite Party to reconsider the location allotted. Had the Complainants chosen to withdraw from the housing scheme, they would have been the losers. There were so many aggrieved allottees who represented to the Opposite Party to reconsider their choice for the location of the tenement, that the Opposite Party issued a press advertisement that it was reconsidering the matter. The press advertisement further stated that possession would be given by December, 1992. However, around April 1992, the Opposite Party wrote to the allottees, confirming the same location allotted earlier. By the time the allottees had paid seven out of the eight instalments. Between the period February to June 1993, the Opposite Party wrote to the allottees stating that there was an escalation in the price of the tenements. The said letters quoted the rate per square metre (which is reproduced at page 8 of the complaint). Annexed to the above-referred letter was another letter stating the other terms and conditions. A perusal of the same will show that one of the said terms and conditions stated therein is: "Watch and ward charges @ Rs. 360/- per calendar month or part thereof are to be paid if the buyer fails to take possession of his tenement within 8 days from the date of intimation which will be intimated at a later date. Possession of the house will be given in phased manner as and when houses are completed". The said letter further stated that 50% of the escalated amount would have to be paid in a specified time (about 1 to 2 months), and threatened that in the event of failure to do so, 15% interest would be levied on the entire escalated amount and also on the M.S.E.B. and other miscellaneous charges. The said letter listing the other terms and conditions further stated: "The buyer will have to pay Power Connection Charges for individual meter directly to MSEB. After formation of the Society or Association as the case may be, they will have to approach the MSEB for common meter for lighting in the stair case and also for water pump installed in each condominium for which they will have to pay the deposit to the MSEB separately. Maintenance of water meter and water supply line within the condominium is the collective responsibility of all the allottees within the condominium. The allottee will have to pay water charges to the appropriate authorities separately. The CIDCO is in no way responsible in this respect." According to the Complainant, it is the responsibility of the Opposite Party to provide electric and water connections. Without the electric and water connections, the Opposite Party cannot issue an occupancy certificate or hand over possession. The Opposite Party may charge for providing the electric and water connections, but cannot ask the allottees to take possession of the tenements without these basic essential amenities. The allottees are entitled to compensation for being handed over possession of the tenements without these basc amenities. The Complainant further states that the above-referred letter issued by the Opposite Party during the period February to June 1993, gives the MSEB charges payable by the applicants for electrical connection. The MSEB charge ranges from Rs. 4,392/- for 18 square metre tenements to Rs. 24,400/-for 100 square metre tenements, which works out to Rs. 244/- per square metre, irrespective of the area/size or location of the tenement. According to the Complainant this is excessive and wishes to dispute the same. However, since this issue may require recording of comparatively more evidence, examination of MSEB officials etc. it would be more economical to file a separate complaint at the State level. The Complainant further states that the escalation between the contracted price in 1990 and the price stated in 1993 works out to about 20%. The Complainant''s grievance is that the said escalation is arbitrary and unjustifiable. Merely because the Opposite Party has been negligent and delayed construction cannot be a ground for burdening the allottees with the escalated cost. Further, the allottees are also entitled to compensation for the delay in possession of the tenements. In July, 1993, some of the allottees received a letter from the Opposite Party. The said letter inter alia stated: "(a) We will execute agreement and hand over the possession of the apartment allotted to you on the date, time and place given above. You are requested to call on the undersigned at the above place on the given date and time and execute an agreement and take over possession of the apartment", (b) "Please note that if you fail to execute the agreement and take over possession of the apartment on the given date and time, you will be liable to pay Watch And Ward Charges At The Following Rates front The Next Day Onwards. This is however, without prejudice to our rights to terminate the Agreement so concluded between our Corporation on one part and you of the other part and cancel the allotment. Besides this, in that even you will have to take possession of the same on the basis of As is where is''". A bare reading of the above letter shows that the terms and conditions have been arbitrarily, high-handedly and- illegally revised. By the said letter the Opposite Party is resorting to coercion and threats to force the allottees to sign the agreements. If the agreements are signed, the allottees would be deprived of their right to seek justice under the Consumer Protection Act. If on the other hand, the allottees refuse to sign the agreements, then they can approach the Consumer Forums, but at the risk of being threatened with cancellation of allotment and demand for watch and ward charges. The value of the tenement according to the Opposite Party approximately ranges from Rs. 65,000/- to Rs.5.75 Lakhs. This would mean that those who refuse to sign the agreement would have to pay a monthly watch and ward charge ranging upto Rs. 5,750/-. The Opposite Party cannot be permitted to force the allottees to sign the agreement at the time of possession as this would force the allottees to accept the escalated price of the tenement. It will be in the interests of justice that the allottees be permitted to pay under protest the amount demanded by the Opposite Party and take possession without being forced to sign the agreement during the pendency of this complaint. The Opposite Party is legally bound to hand over possession of the tenements at the price contracted in 1990 and is not entitled to levy any escalation charge. The Complainant further submits that for the period of delay in possession, the allottees are entitled to interest at the rate of 18% per annum on the amounts paid by the allottees up to 29th June, 1992 i.e. the due date for the eighth and last instalment. The Complainants are further entitled to a refund of the escalated price paid under protest, together with interest thereon from the date of payment till refund/realisation. The Complainant allottees are also entitled to compensation for physical harassment and mental tension.

IT was further the case of the Complainant Association that as an association it has taken up general public interest issues which are applicable to all the allottees listed at Exhibit ''A'' of the paper book. The filing of the present complaint should not affect the specific individual grievances such as allotment of tenements at different locations, allotment of different areas/sizes of tenements than what was applied for, etc. which the allottees may want to be redressed at the District or State level of the Consumer Disputes Redressal Agencies. The reliefs prayed for in the complaint are as follows:" (a) that the Opposite Party be directed to give possession of tenements at the rates contracted in the year 1990 at the time of allotment; (b) that the Opposite Party be directed not to levy any escalation charges; (c) that the Opposite Party be directed to refund to the allottees the escalation charges collected; (d) that on the aggregate amount of the eight instalments paid by the allottees, the Opposite Party be directed to pay for the period of delay, interest, at 18% per annum from 29th June, 1992 till actual possession; (e) that on the escalation charges collected, the Opposite Party be directed to pay interest at 18% per annum from the dates of payment of the escalation charges till refund/ realization; (f) that for those persons who have been allotted tenements in Vashi (including Sanpada), the Opposite Party be directed to disclose the premium charged for these locations and the manner in which it has been included in the price of the tenement; (g) that the Opposite Party be directed to pay token compensation of Rs. 1,000/- to each allottee for being given possession of a tenement without the basic essential amenities of electricity and water; (h) that the Opposite Party be directed to pay compensation of 10% of the price of the tenement as declared by the Opposite Party in 1990, to each allottee for the physical harassment and mental tension; (i) that the Opposite Party be directed not to force the allottees to enter into an agreement at the escalated price, but at the price declared and contracted in the year 1990 at the time of allotment; (j) that the Opposite Party be directed not to levy any watch and ward charges, but to hand over possession since the full amount, including the escalation, has been paid under protest; (k) that costs of the complaint be awarded to the Complainant."

It may be mentioned here that subsequently the Complainant Association filed two more lists of its members who might have joined it later on.

THE Opposite Party contested the complaint by filing a counter. Some Preliminary objections were taken but we need not refer to them as those were not urged before us perhaps, in view of the Supreme Court Judgment in Civil Appeal No. 6237 of 1990 Lucknow Development Authority v. M.K. Gupta with S.L.P. (C) Nos. 659/91,16842/92, C.A. Nos. 3963/89,5534/90, 6234/90, 5257/90, 2954-59/92, decided on November 5, 1993=111 (1993) CPJ 7 (SC). On merits it was pleaded that one of the main functions of it has been to undertake construction of houses for different income groups so as to hasten the growth and development of New Town of New Bombay. That till 1986, the Opposite Party used to take up the construction of approximately 4000=5000 houses per annum in various nodes in New Bombay. The houses were constructed departmentally by utilising services of in house Engineers and Planners. In their meeting held on 20th March, 1987 the Board of Directors of the Opposite Party while discussing the proposal for a major turnkey housing scheme at Koparkhairane opined that such a large housing scheme cannot be taken up without ascertaining the demonstrable demand and tying up of financial resources. Demand registration survey was conducted in the month of June-July 1987 with a view to ascertain the demand of houses in the New Townships of New Bombay by inviting applications from the public at large under the scheme known as "DRS 1987". The Opposite Party received 55,000 applications which was completely unanticipated as a similar demand survey of housing in one of the nodes of the new township of New Bombay conducted earlier had indicated a very low demand. The infrastructure and the in-house machinery of the Opposite Party were not geard up as also not prepared to complete the construction of so many houses. Thus, in view of such an overwhelming demand, the Opposite Party had to work out a new approach in the construction of the houses to maintain the excellence in the quality of the houses to be constructed and expedite the process of construction to obtain the desired results in shortest possible time. The Opposite Party had to address to itself with various techno-legal problems and envisage a viable scheme to meet with such a huge demand. It took the opinions of eminent personalities when meetings were held on 30th October, 1987 and 6th November, 1987. The Vice Chairman and the Managing Director of the Opposite Party thought that though the response to the demand registration was so overwhelming, the Opposite Party was committed to develop the houses. However, in view of the past experience and criticism of the quality of houses built by the Opposite Party, he was not in favour of the Opposite Party itself taking up any construction. The Managing Director of the Opposite Party indicated two alternative methods for constructing the houses. One method could be that an identified project of 1000 to 1500 houses would be assigned to an architect who would select a professional construction management team, execute the project and hand it over to the Opposite Party for allotment of individual dwelling units. The other method could be that developers be invited to get on turnkey basis with their own design but based on requirement and specification laid down by the Opposite Party. The developers will construct the houses and hand them over to the Opposite Party allotment to the applicants. Under both the methods, the role of the Opposite Party would be only of coordination and it will have no direct involvement in the construction of houses. It was further resolved that the architect in the first case and the developer in the second case would be responsible to the allottee for any defects found in the construction. (A copy of the Minutes of the Meetings held on 30th October, 1987 and 6th November, 1987 have been annexed to the counter). On the selection of the architects, it was felt that most appropriate method, which would also not delay the project, would be that five project architects of proven merit may be identified by the HUDO Architectural Advisory Committee in which Vice Chairman and the Chief Planner of the Opposite Party would also be invited. For selecting architects for the remaining projects, a single architectural competition may be held for one site and four or five architects whose entries are adjudged the best be comissioned for the remaining projects. A meeting of Board of Directors of Opposite Party was called on the 17th November, 1987, to adopt the new approach in the development discussed in the meetings held on 30th October, 1987 and 6th November, 1987 and it was resolved that as suggested in the earlier meetings, to have three-tier consultancy to carry out the job of planning, designing and implementation of development projects of the city. It was proposed that in the first phase around 21,000 tenements would be constructed as per the detailed break-up of node-wise and tenement type-wise. It was resolved that in the first method 1000 to 1500 houses would be assigned to an Architect i.e. Action Area Consultant or Task Consultant would select the Professional Construction Management Consultant with the consent of the Opposite Party and execute the project and hand over to the Opposite Party for allotment. The Opposite Party proposed that 50% houses would be constructed by this method. Incase of second approach which would cover the balance 50% houses, the developers would be invited to quote on turn-key basis with their own design but based on the requirement and specification laid down by the Opposite Party. It was proposed that the developers would construct the houses and hand them over the Opposite Party for allotment to the applicants. The Opposite Party further states that the new approach of planning and execution of proposed DRS Scheme was finally approved in the month of November, 1987. Thereafter, the pre-qualification of various agencies which were to be involved for the execution of the construction of the houses were to be pre-qualified and hence the process of pre-qualification was started in the month of November, 1987. On 17th November, 1987, when the Board of the Opposite Party approved the new approach, the various agencies which were to be involved in the construction of the houses, were classified and categorised as under:" (a) Turn-key Developers; (b) Turn-key Contractors; (c) Project Management Consultants; (d) Architect Management through Competitions; (e) Pre-fabricated Housing Scheme.

Such an unprecedented and unexpected demand involved huge amount of efforts even in processing the applications to decide whether the applicants were conforming to the eligibility criteria and then to classify the applications for the purpose of deciding the priorities as it was humanly impossible for the Opposite Party to construct 55,000 houses as per the demand. The Opposite Party had also to coordiante with HUDCO for finalising the loan scheme for those applications which were falling under the Hire-Purchase Schemes. This certanily took some time despite the persistent and continual efforts at a very large scale by the Opposite Party involving almost all the resources that it had at its disposal. On 8th April, 1988, the Opposite Party decided to prioritise the applications received and put them in categories so that the houses could be constructed and handed over in phases as per the priorities. The Opposite Party was entitled to prioritise the applications received by it for the sake of convenience inasmuch as the demand survey did not-vest any rights in the applicants. On the 21st April, 1988, the Board approved the priorities and the same was published in newspapers. Further on 12th of August, 1988, the Board of the Opposite Party approved the payment of 7% interest on the registration charges to those who did not wish to continue their registration with the Opposite Party and decided to withdraw. On the 23rd of September, 1988 the Board of Directors of the Opposite Party in their 248th Meeting decided to approve the proposal of Pre-Qualification of Developers and immediately resolved to take the following steps" (i) To issue public advertisement in Leading newspapers; and (ii) To issue informative Booklet.

In the informative booklet it was mentioned that the developers will be required to furnish performance guarantee for the entire work ensuring quality control to CIDCO. In the 254th Meeting of its Board of Directors, the pre-qualification of the contractors for the Construction of Mass Housing Project on Turnkey basis at New Bombay"under contractor''s Scheme was approved. It was decided vide above Board Resolution that the works could be executed under two schemes, viz. (a) Developer''s Scheme; and (b) Contractor''s Scheme. The Board had till then already approved the short list of developers and project management consultants. The said proposal was to short list the contractors for contractor''s scheme. Thereafter public advertisements were issued in the 2nd week of May, 1988, in leading newspapers in all four metropolitan cities inviting applications from experienced, reputed and competent building contractors to submit their bio-data and information for pre-qualification. It was also decided to allow applications by Group of Contractors under Joint Ventures/ Consortium, to increase the element of competition and hence the final date of submission was extended upto 26th June, 1988. It was also decided that Joint Ventures/Consortium could be issued tenders and also would be allowed to quote for all tenders but would be awarded one work even if they are lowest in more than one work. This was done only with a view to avoiding the concentration of more than one work with one firm so that they could complete the work in the stipulated period. Meanwhile, they made an offer to the applicants of priority one for allotting them 25 sq. mtrs. and 35 sq. mtrs. houses at Airoli Node if they wished to take the same as those houses were already completed and were lying unallotted. On 3rd March, 1989, advertisement was issued in two leading newspapers inviting tenders for the construction of houses in three nodes on the basis of prefabricated industrialised components. The last date for the submission of the particulars of technology and personal particulars was fixed as 29th March, 1989. 22nd August, 1989 was fixed as the last date for the receipt of the tenders of pre-fab technology construction scheme and on the 2nd September, 1989, the Resolution No. 4825 was passed for the pre-qualification of prefab tenders.

THE Opposite Party has given the dates on which the contracts for construction were awarded to the different Surveyors. The dates commenced from 15th September, 1989 to 9th May, 1990 and the date of handing over the side. The various agencies were asked to complete the houses on the dates mentioned in each contract. The dates followed were computed from 8th October, 1991 to 8th May, 1992. Meanwhile on the 16th October, 1989, the Board of Directors of the Opposite Party resolved that the conditions of 15 years stay in Maharashtra would be applicable only to P-III Category applicants. After awarding the contracts, they continued the follow-ups diligently and persistently to see that the houses were constructed at the earliest (and in that direction whatever steps were taken up by the Opposite Party have been outlined at pages 24,25,26 and 27 of the counter). Locational draw was held on computer on 27th August, 1991 for 14,147 applicants who had paid first instalment within due date or within three months thereafter. During this draw 2,980 applicants could not get locations within three preferences given by them. The Board looked into the problems arising after draw held on 27th August, 1991 and approved the proposal of allotting alternative houses at Airoli or Kopar Khairana wherever available. On 22nd November, 1991 an advertisement was inserted asking the list of such of the P-I and P-II people, who could not get houses within three preferences given by them to represent on or before 29th November, 1991. They were informed that they could apply for change from HP (high purchase) to OP (outlight purchase) or for tenement of higher size if it was available at a location within three choices. List of available number of tenements at different locations after draw was displayed in the Opposite Party''s Office. 2,902 applicants represented in reply to this advertisement. After weeding out double/triple representations of the same applicants had asked for areas much in excess of their original booking (representations asking for area one stage higher than the original booking were allowed), 1170 applicants remained, whose date entry of original choice and actual allotment of new choice given was got done on computer. On the other hand, defaulters of 1st and 2nd instalments which were extended upto 18th September, 1991 and defaulters of 3rd instalment which was extended upto 31st October, 1991 were treated as cancellation of houses allotted to them and were made available for the second draw. After confirming the data entry of challans of payments made, second draw was held on 29th April, 1992. In this draw 179 applicants were considered for longer areas along with change of the locations. Thereafter, a letter was sent to all these applicants giving result of the second draw, explaining why the houses could not be give within three choices they had suggested and giving them option to withdraw. Based on the new approach, CIDCO was able to award 15,273 tenements in 7 nodes during the year 1989 and 1990, although it was planned at that time to construct 24,098 tenements for meeting the demand from Category I and II buyers. The tentative sale prices were worked out on the . basis of awarded value of 15,273 tenements. By this time, the applicants who opted for hire purchase facility were also assessed and the Opposite Party prepared scheme for availing loan for the tenements having built-up area of 18 sq. mtrs. to 50 sq. mtrs. Thus two sets of sale prices were worked out i.e. (i) for those who opted for out-right purchase basis (self-financing basis) and (ii) for those who opted for hire-purchase scheme of HUDCO. These prices were communicated to the prospective buyers by the Opposite Party vide its letter dated 20th July, 1992, who registered their demand under Categories I and II and were asked to pay the price in eight instalments of which the first was due on or before 30th October, 1990. While communicating the price, the buyers were also given an opportunity to withdraw from the scheme if they desired and take back their initial amount -paid for registering their demand along with interest @ 7% p.a. on the same. It was also indicated that the final prices would be worked cut based on the completion cost of these tenements and escalation in the final price will be around 10%. While assessing the demand prices of different type of tenements i.e. 18 sq. mtrs. to 100 sq. mtrs. were indicated on a tentative basis. These prices were worked out on the basis of the then type, designs/ specifications and the prevailing construction cost. The prices indicated in the booklet were in tune with HUDCO norms and ranging from Rs. 33,000/-for 18 sq. mtrs. to Rs. 3,35,000/- for 100 sq. mtrs. During the process of construction, cost of construction increased manifolds for reasons beyond the control of the Opposite Party due to the Gulf War in 1990-91 and further accelerated by ab-normal inflation (around 14%) that engulfed the country during 1990-91 and 1991-92. Due to the said factors, there was persistent demand from the contractors to compensate abnormal escalation from the first year of the contract even though it was not part of the agreed contract condition. In fact, the Public Works Department, Government of Maharashtra passed a Resolution on 10th February, 1992 directing the Opposite Party to allow Special relief to the contractors in relaxation of the respective contract/tender provisions. The Opposite Party, therefore, approved the payment of abnormal escalation. Since the costs had gone up, the Opposite Party had no option/other alternative but to consider the escalation as per the formula stipulated in the Maharashtra Government G.R. dated 10th January, 1992. Considering all these aspects, the Opposite Party took up a final basic construction cost as considered in priding comprising of awarded value plus normal escalation paid plus special relief paid plus extra items plus 3% on steel and cement and extra electrical works etc. The revised pricing exercise of 15,273 tenements was taken up in August, 1992. The revised pricing exercise revealed that the construction cost had increased onran average by 29.38% i.e. Rs. 176.57 crores as against the awarded value of Rs. 136.47 crores. Similarly, the land development/infrastructural works, the over-all increase was 30.37% over and above the awarded value considered for pricing in June, 1990.

HOWEVER , the average increase in the rate for the entire 15,273 tenements is 19.72% as against the prices worked out in June, 1990. Therefore, it was decided by the Board to apply the overall increase of 19.72% for all types of tenements and work out the final sale prices on this basis. It was also decided that to compensate the purchasers, the Opposite Party should pay 14% compound interest on the initial registration amount paid by buyers. Thus, net incidence of price increase was restricted to a maximum of 15.92% to a minimum of 12.87% increase over the communicated price of July, 1990. While communicating the price of tenement, the Marketing Manager could not inform the buyers of tenements in Vashi/Sanpada node the somewhat higher prices in these two areas compared to other locations since the location draw was not carried out, though a mention was made in the letter dated 20th July, 1990 that the prices of tenements in Vashi/Sanpada would be higher by 5 to 10%. This is in addition to actual escalation. The consequent increase in price in Vashi/Sanpada compared to other nodes ranges from 2.07% in case of 18 Sq. Mtrs. to 8% in case of bigger house attributable to higher land prices. In the case of tenements constructed under the Hire-purchase scheme funded by HUDCO, the methodology adopted for working out the sale prices are same as in the case of Outright Purchase (Self-Financing) Scheme as explained above except the loading of interest liability on HUDCO loan including the upward revision of interest rates. The increase in the sale price in the case of the Hire-purchase is of the order of about 24.5% over and above the July, 1990 communicated Hire-purchase Price.

ACCORDING to the Opposite Party, there has been no deficiency in service on their part nor they have adopted any unfair trade practice. It was denied by the Opposite Party that the booking of the tenement according to the area/ size had a direct nexus with the income the applicant earned. The classification of income group was relevant only to the Hire Purchase Scheme to get the loan to such hire purchasers. Such classification was not at all relevant in respect of the outright purchasers. To increase the pace of work the Opposite Party did the following things though they were not there in the original terms: (i) Opening of their own petrol pumps to provide fuel to the contractors; (ii) Providing of the water and electricity to the contractors; (iii) even providing of cement and other materials from their own stocks; (iv) During the period of liquidity crunch providing them advances not in the original contract so that they did not abandon the contracts. The advances were given at the rate of 18% per annum when even the Bank rate was much higher at 26% per annum and the market rate was even higher. (v) In the month of January to hasten the work of construction, the need of coordination staff was felt by the Board and these additional posts were created. Thus the Opposite Party have been all along trying to ensure that the houses were completed as early as possible. The hike in the prices was only 19.72% and after adjusting against the compound interest of 14% to the applicants, the net increase was limited to 15.92% to a minimum of 12.87%. In addition to the factors already stated above about the delay in handing over the possession, there were other factors also like outbreak of violence in Ayodhya and Bombay thereafter from December, 1992 to June, 1993 which affected the labour position and the transport of materials very badly thereby work of the construction suffered. Thus the delay has been due to the circumstances beyond the control of the Opposite Party. When the escalation was charged, the Complainants were given opportunity to withdraw if they did not wish to continue and the Opposite Party had offered to pay interest on whatever amount they had paid. The provision of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, are not applicable to the Opposite Party under the provisions of Schedule I of the MRTP Act. The MSEB charges are directly to be paid to MSEB and the Opposite Party has to only inform the allottees about the same. The Opposite party is not recovering the interest on the MSEB and other miscellaneous charges. The Opposite Party provided the meter electricity connections to each tenement constructed by them. However the electric metre installation deposit has to be paid by each allottee individually to the MSEB authorities. The Opposite Party discharged their responsibilities vis-avis each allottee for providing the electricity and water connections. The Opposite Party has not asked any of the allottees to take the possession of the tenements without the basic and essential amenities like electricity and water connections. The watch and ward charges have already been dispensed with by the Opposite Party. The MSEB has revised its charges and the amount paid in excess thereof are being refunded by the MSEB to all the allottees. Finally, the Opposite Party states that they have provided all the basic amenities to each tenements as required under the provision of law.

We have heard the parites and gone through the records. The grievance of the complainant is two-fold. The first grievance is that there is delay in the construction of the houses and the second one is regarding escalation in the prices of the houses and some other: charges said to have been levied by the CIDCO. We will take these grievances of the Complainant in seriatim. CIDCO issued a booklet annexure ''T'' titled "Demand Registration Survey for Tenements in Seven Townships in New Bombay". This shows that it was only a sort of survey. In response to the said booklet inviting applications, CIDCO received about 55,000 applications which according to the CIDCO was completely unanticipated. It was a herculean task to scrutinise and sort out all the applications in order to decide whether the applicants were conforming with the eligibility criteria and then to classify the applications for the purpose of deciding the priorities. It was also humanly impossible for the Opposite Party to construct and provide 55,000 houses as per the demand. The earlier demand survey of the housing scheme in one of the nodes of the township of New Bombay conducted earlier had indicated a very low demand. So many applications had to be scrutinised and the machinery of the Opposite Party was not geared up and it was not prepared to complete the construction of so many houses. Thus in view of such overwhelming demand CIDCO has to work out a new approach in the construction of the tenements. In its counter the CIDCO had explained that it had to address to itself with . various techno-legal problems and envisage a viable scheme to meet with such a huge demand. Various meetings were held between CIDCO and the Architects. A Project Coordination committee was constituted with the Vice-Chairman of the CIDCO as its Chairman, Advisors, Chief Planner and few prominent citizens.

WE have carefully gone through the counter of the Opposite Party and find that there has not been any undue delay in the steps taken by CIDCO in finding out the ways and means to provide so many tenements. The facts stated by CIDCO in its counter have already been given in detail above. All possible steps were taken by CIDCO to construct such number of tenements as soon as possible. We are of the opinion that in the present case CIDCO cannot be held guilty of delay in the construction of the tenements and the delay such as has occurred was caused due to the circumstances beyond its control and not due to its negligence. It may be mentioned here that CIDCO even allowed compound interest at the rate of 14% p.a. on the registration charges on realising the hardship of the allottees.

THE second grievance of the Complainant has also no force. Clause B Condition No. 20 of the Booklet (Annexure "1" appended for counter) clearly lays down: "I understand that after finalisation of the demand survey, deciding the eligibility and other formalities including inviting tenders, CIDCO will intimate me the final terms and conditions of the offer indicating the area/sale price etc. giving me an opportuntiy either to join in the scheme if I am , found eligible or to withdraw from the scheme". Thus, the final terms and conditions of the offer were to be intimated after finalisation of the demand survey. The applicant had the option either to join in the scheme if found eligible or to withdraw from it. Therefore, the Complainant cannot now complain about the prices and other charges demanded by CIDCO. The question of price is only relevant when the goods are purchased from a trader and the price charged is in excess of what has been fixed by any law or declared on the package. The quantum of consideration is not relevant in relation to ''service''. "Deficiency'' in service has been defined under Clause(g) of Section 2(1) of the Consumer Protection Act as : "deficiency" means any fault, imperfection, short coming or inadequacy in the quality, nature and manner of performance which is required to '' maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service". If a person has undertaken to perform a service pursuant to a contract or otherwise and demands consideration which in the opinion of the hirer is exorbitant it cannot be said to be a deficiency in the rendering of service. This Commission has consistently held that the dispute about pricing of a flat or a plot does not fall within the purview of the Consumer Protection Act. In this respect reference can be made to Gujarat Housing Board v. Datania of 1991 decided on 7th October, 1993 and Gurinder Bedi v. Delhi Development Authority, III (1993) CPJ 404 (NC). Hence, the complainant tic cannot be now permitted to contend that CIDCO cannot charge escalation charges or any other by charge.

IT would not be out of place to mention here that in the counter the Opposite Party vide para No. 12 (on merits) has stated that it has dispensed with the watch and ward charges. The MSEB charges are to be paid by the allottees directly to MSEB. The Opposite Party has stated that before delivering possession to the allottees water and electric connection had been provided to each of the tenement constructed by it, but the electric installation deposit has to be paid by each allottee individually to the MSEB. It is further the plea of the Opposite Party that none of the allottees has been asked to take possession of the tenement without the basic essential amenities like the electricity and water collection. Thus, the allegations of the Complainant that the allottees are being forced to sign the agreement without the essential amenities being provided to them is incorrect.

FOR the reasons given above, we do not find any force in the present complaint and dismiss the same with no order as to costs.