SUKUMAR H.MEHTA vs AHMEDABAD URBAN DEVELOPMENT AUTHORITY

THE Ahmedabad Urban Development Authority (hereinafter referred to as AUDA) prepared a scheme designated as ''AUDA Towers'' which was also described as Pride of Ahmedabad, for shopping-cum-office complex near Drive-in-cinema in Ahmedabad, a new concept of commercial complexes offering facilities for the first time. THE brochure published by the Chairman, AUDA, Mr. A. Prasad, IAS with Chief Executive Authority and Sr. Town Planner giving maps and particulars in term stated that "knowing the fact that this area needs a full fledged shopping-cum-office complex, AUDA presents a scheme "AUDA Towers". THE location is adjoining Ahmedabad T.V. studio opposite Drive-in-Cinema. AUDA Towers is superbly designed to meet the needs of small, medium and large scale business units. Entry to the complex is available from both the roads adjoining the site. An independent entry is provided for vehicle parking near the entrance and in the basement. Besides shopping at ground floor and offices at first floor, two towers are rising from podium level for office premises, nursing homes, consulting rooms etc. Towers are projecting outwards from lower to upper floor. THE unique feature of sloping windows which allows a complete view of the terrace garden and green space below. AUDA Towers will certainly be a prominent land mark. You will be happy to own a unit in the complex. We assure you that, it will be an architecturally unique complex, when completed of which you, as well as the city will be proud of."

FROM the brochure one gets an impression that the scheme was a novel and unique scheme and the business opportunities were immense situated on the main road in a developing area with all modern amenities and facilities with imposing appearance. The complainants are qualified doctors and were in need of the premises for their intended nursing home at a prime place. The scheme for commercial complex put by AUDA met their requirements and, therefore, they did not book rooms for nursing him elsewhere and became member of AUDA Towers project near T.V. Tower on Drive-in Road. Xerox copy of the brochure is produced alongwith the complaint. The complainants have booked 1800 sq. ft. in carpet area on the first floor of Tower No. 1 for prospective use of their nursing home. The complainants considered that they will not be required to pay any unaccounted money, construction would be carried out as per schedule and there will be no deliberate delay in handing over the possession as being done by the commercial builders. That after the construction of the building there will be less problems for repairs and maintenance.

The complainants booked the premises on the first floor and paid booking charges on 30.9.87 amounting to Rs. 74,800/- and thereafter paid Rs. 43,000/-, Rs. 42,000/-. Rs. 31,500/- and Rs. 11,000/-. In this way within a period of 4 months the complainants have paid a substantial amount of Rs. 2,01,500/- as demanded by the opposite party. The complainants were also ready and willing to pay the amount required to be paid in the stipulated instalments. The opposite party showed no progress and all of a sudden in the year 1990 to the shock and surprise of the complainants they received an intimation by a memorandum dated 10.8.90 that the AUDA does not desire to proceed with the project of AUDA Towers and has passed the order to return the amount received towards booking and this letter referred to the various payments made by the complainant. They were further informed that they may contract the Accounts Office with receipts. The complainants gave a reply vide letter dated 27.8.90 narrating the reasons for joining the scheme for his nursing home regretting that this desire has not been fulfilled and requested that when AUDA starts other schemes he should be given preference in the booking. They have also stated that AUDA has taken a unilateral decision to drop the project. They have therefore demanded interest at the market rate. But as it always happens in this case also the opposite party did not agree to answer the letter. That the opposite party was duty bound to send the amount by cheque or draft directly to the complainants but has informed them to collect the money after showing the receipts and paid the said amount without any interest or without giving any answer or without showing any regret for dropping the project. It was evident that the opposite party had kept a substantial amount of money of the complainants and other applicants for nearly three years but did not show even the courtesy to reply the letter or pay any reasonable interest. In other words, the opposite party did not accept the offer made by the complainants to give priority when other project is taken up or to give interest at market rate. The opposite party could have accepted the offer to save itself from the damages. But having rejected the offer and compelled the other side to collect the money from the office of the opposite party, the offer made by the complainants naturally did not materialise and was rejected. We have reproduced this because subsequently in the written statement AUDA has taken a plea that the complainants have demanded only interest and are not entitled for damages.

THE complainants being aggrieved by the unilateral dropping of the scheme without disclosing the reasons and method in which they have been treated have filed the present complaint and have prayed for the order directing AUDA to resume AUDA Towers project as previously announced; directingthe opposite party to restore the complainant''s booking in AUDA Towers as was agreed by AUDA or in the alternative direct AUDA to pay the complainants compensation of Rs. 2 lakhs alongwith interest on the amount which has been detained by the opposite party. In response to our summons the opposite party has filed a written statement signed by the Assistant Town Planner Mr. N.K. Patel contending that the complaint of the complainants was false, frivolous, vexatious and malafide, outside the jurisdiction of the Commission and denying the averments made in the complaint. In para 5 of the written statement the opposite party has admitted that AUDA Towers was initiated. On Final Plot No. 5 of Bodakdev Town Planning Scheme No. 1 by the opposite party in the larger interest of the public at large. In January 1986 M/s. M.C. Dalal and Company was appointed for the said project on turn-fee scale. In December 1987 administrative sanction was given for the said project to the tune of Rs. 1,59,00,000/- and a policy decision was taken by the opponent in the interest of public at large for inviting the tenders including materials and labour charges. Again, the tenders were invited in 1988. Thereafter again it was re-invited but the same was rejected by the opposite party in a larger public interest and ultimately after considering the pros and cons of the situation, circumstances and in the public interest with a view to safeguard the public interest it was decided by the opposite party to drop the Auda Towers project.

WE are constrained to say that at one place the opposite party states that the project of AUDA Towers was initiated for the larger public interest and the same also have been dropped for larger public interest. The only particulars given is that the opposite authority has undergone expenses of Rs. 7.8 lakhs till that date. WE are unable to understand what is the public interest if the amount of Rs. 7.8 lakhs has been spent for no reasons and that too for the public interest. No date is given as to when such a decision was taken. In para 7 the opposite party has further submitted that the object of the opponent for the said project was bona fide and to become helpful to the public at large but same could not materialise because of compelling and unavoidable circumstances. No reasons have been shown so as to Judge whether they were avoidable or unavoidable except saying that the complainant has written certain things with ulterior motives. Rest of the averments are as regards to the denial of the claim of the complainant. The complainants have thereafter filed an affidavit-in-rejoinder. In para 5 thereof they have stated that the opposite party has not explained why despite the tenders being invited and received none of them was accepted by the opposite party. The opponent has not explained why the project was dropped and what was the public interest that warranted the dropping of the project. The contention of the complainant is that the opposite party has not explained why after floating the project and after inviting booking from the members of the public and even after inviting tenders, the project was dropped. The complainant has in term stated that "the opponent should be put to the requirement of revealing the circumstances under which the project was decided to be dropped. After all a public Corporation cannot take an arbitrary decision to drop the project set up in public interest". They have further demanded that the opponent should be required to state how the land on which the construction as projected was to come up is being utilised at present. It should be revealed whether the land is being put to any public use or whether the land has been utilised for private gain of any contractor or building organiser or dealer in real estate if not retained by the opponent. According to the complainants all these are necessary in order to ascertain whether the dropping of the project was bona fide or not. The second question raised by the complainants is that when the project was undertaken right from 1985 which was bona fide and to become helpful to the public at large, the opponent has not explained why suddenly public interest was ignored in dropping the project. The matter was kept for hearing on 18.9.91 but the learned advocate of the opponent gave an application stating that he was sick and the matter was adjourned to 26.9.91 for hearing the argument. On the said date the complainants closed the evidence. Mr. B.C. Patel again gave an application that with regard to the contention made in the affidavit-in-reply filed by AUDA the matter may be adjourned for taking oral evidence of opposite party in the interest of justice. The Commission therefore passed an order that when the officer comes for oral evidence he may bring the relevant records. However on the said date instead of bringing the officer for oral evidence filed an unaffirmed affidavit of Dy. Town Planner alongwith certain documents in order to meet with certain allegations made by the complainants and the vakalatnama of learned Advocate Shri K.C. Shah. Since this document is not verified or sworn we will treat it as an unaffirmed application. It appears that the said project provided in the cellar 24 godowns covering 509 sq. mt., ground floor, first floor etc. as stated therein which means that it was a very useful project. The first lowest tender was rejected because of non-payment of security deposit. We are unable to understand this. If the lowest tender was without security deposit it was not a tender and the next higher tender could have been accepted. The next reason given is that for completion of the project the opposite party had no sufficient manpower to look after and maintain the project. This reason does not appear to be a sound one because the manpower has always to be employed and this could have been taken into consideration at the time when the project was initiated. Thereafter it states that AUDA has spent Rs. 6,16,000/- including architect consultant fees. In the meeting some members expressed the view that AUDA Towers project was not desirable considering the limited source of finance and other difficulties of the opponent as well as priority work such as drainage T.P. Roads etc. should be given preference instead of such projects. This reason also does not appear to be proper because these are the reasons which are to be Regarding financial difficulty we are not impressed because the finance were to be acquired from the persons who have booked the premises. The land was belonging to the AUDA which was very valuable and, therefore, in such a construction practically no finance is required except the payment to the architect which has already been paid. The view of the members are not supported by any technical report/opinion. No effort has been made to appoint a committee of experts. It appears that by a decision the AUDA decides to initiate the project, takes amount of booking and instalment, spent money for architect and planning and then on a change of view without any technical report/opinion drops the project. Another reason which is given is that there was a very poor response to the demand survey. The scheme which has been announced does not show that it was a demand survey. It was a firm scheme and administrative sanction was also given. But after announcing the scheme it appears that the AUDA has not taken any interest for the reasons best known to them and kept the money for almost three years. Ahmedabad city was developing very fast, particularly the Drive-in area where there is a T. V. station and cinema and number of shops were coming up and the prices were rising at a very high speed. Therefore there was little question of selling but no efforts having been made, no evidence having been laid before us that AUDA has made any efforts, was interested in going with the project except paying big amounts to the architects and planners. No other reasons have been shown as to why the project has been dropped when the prices were going higher and higher every year. The complainants have raised the question regarding the disposal of this land. Not a word has been stated by the Dy. Town Planner as to what has happened to this land which may throw some light for dropping the project. We have perused the resolution. We do not find any valid reason except the fact the AUDA had intention to sell the land to earn money for its development projects. It also appears that AUDA was very much in need of their office building. We do not know whether the Municipality might help in obtaining the building. If this project has been executed AUDA would have its own building. Unfortunately no-other evidence is given. In any view of the matter we are not very much concerned whether AUDA has rightly or wrongly dropped the project. It is evident from the evidence that AUDA having entered into a contract of providing the premises to the general public and particularly to the complainants which was alleged to be in public interest when the same was booked has refused to provide the same nearly after 3 years with the result that the complainants have to go for some other premises for the purpose of their nursing home which is definitely a deficiency in service. The scheme was floated by AUDA to sub-serve the public interest, to provide commercial shops, godowns offices etc. to the general public at a reasonable rate. The Authority has kept the money for nearly three years and after three years if the complainants have to find out a similar premises they have to pay higher price both for land as well as construction. Again if he books the premises in the year 1991 after getting the money he will have to wait for three years or more or he has to purchase the ready premises at a very high rate. In these circumstances the following points arise for our consideration. 1. Whether the scheme of AUDA Towers Project made and published by AUDA was services and whether this Commission has jurisdiction. 2. Whether the complainant is entitled for any compensation. If he is entitled to compensation what should be the amount.

AFTER the decision in the case of U.P. Avas Evam Vikas Nigam Ltd. v. Garima Shukla & Ors. decided by the Hon''ble National Commission reported in I (1991) CPJ 1 (NC)=1991 (1) CPR 387, there remains no doubt that all these projects undertaken by the Statutory Corporations for the benefit of the public is a service falling within the provisions of the Consumer Protection Act. There are also decisions in respect of Delhi Development Authority to this effect. We have also taken decisions in the projects undertaken by Gujarat Housing Board for providing of such amenities under the scheme organised by statutory authorities as a service within the meaning of hiring of service. We therefore hold that we have jurisdiction to hear this complaint.

WITH regard to the next point it is admitted by the opposite party that they had published the scheme of AUDA Towers. The brochure is also on the record. In the written statement AUDA has admitted about the scheme. There was no question of demand survey. A substantial amount of Rs. 2,01,000/- have already been recovered. Architects were paid, tenders were invited but thereafter the opposite party lost interest for the reasons best known to AUDA. No account has been given of the land though allegation has been made. The money has been kept for nearly three years. The decision was taken by a resolution No. 43(89-90) on or about 7.10.89. The officers of AUDA are negligent and they took more than 10 months in informing the complainant vide its letter dated 10.8.90 that the AUDA Tower Project has been dropped leaves no doubt to us that there is a great deficiency in service and gross delay in returning the money to the complainants. The complainants having suffered throughout on account of deficiency in service and breach of contract and negligence of the officers, the opposite party is responsible for the damage to the complainants. Having come to the conclusion that the complainants are entitled for damages, according to our opinion the opposite party is liable to pay the damages which will be the difference of booking price and the market price prevailing at the date of cancellation or repudiation of a contract by the AUDA. The complainants have been informed for the first time by memorandum dated 10.8.90 (Annexure II) that AUDA had decided not to carry cut the project and has passed an order to return the booking amount. This date would be the date for the purpose of deciding the difference. The complainants have booked 1800 sq. ft. carpet area on the first floor of Tower No. 1 for the use of his nursing home @ Rs. 4,300/- per sq. mt. as fixed by the AUDA. In the additional affidavit the complainant has stated that the National Building Corporation which is a Central Government undertaking is undertaking the projects of commercial complex known as NBCC house near Shajan and College which is the nearest Government undertaking. The rates mentioned are Rs. 900/- per sq. ft. which according to him would come to Rs. 9,500/- per sq. mt. i.e. more than double the rates. In reply to this affidavit the Dy. Town Planner Mr. Jadav has filed an affidavit which states that the prevailing market rate in 1989 were varying from Rs. 300.00 to Rs. 500.00 per sq. ft. depending upon the location. According to him the AUDA scheme was outside the Municipal area. In a city like Ahmedabad a distance of 1 to 2 kms. is not a very big distance because AUDA project is situated near the T. V. Station where the development is phenomenon. Even Mr. Jadav is not right when he quotes the rate of 1989 because in the instant case we have to assess the damages on the rates prevailing in August 1990 and not 1989. The figures given by Mr. Jadav cannot be accepted because in the year 1987 when the premises were booked the rate was Rs. 4,300/- per sq. mt. which means the rate was about Rs. 400/- per sq. ft. whereas he has given a rate of Rs. 300/- to Rs. 500/-. Considering the fact that the rate per sq. ft. in Ambawadi area which is also a well developed area was Rs. 900/- per sq. ft. which was also the rate of Government undertaking, we are of the opinion that even if we take a most conservative figure such a Government project at the place where the AUDA Tower was to be constructed on the main road the price cannot be less than Rs. 500/- to 600/- per sq. ft. The complainant has claimed Rs. 2,00,000/- only and, therefore, by taking the minimum conservative figure of Rs. 500/- per sq. ft. we assess the damage at Rs. 1,80,000/- i.e. @ Rs. 500/- per sq. ft. Therefore the difference would be Rs. 100/- per sq. ft.

The complainant has blocked his money for approximately three years and if we take the interest @ 18% as the base the interest on Rs. 2 lakh would come to Rs. 1,08,000/-. The complainant is also entitled for the appreciation in the property. We are, therefore, of the opinion that the figure of damage at Rs. 1,80,000/- is quite equitable, just and proper. Considering the facts and circumstances we award the interest from the date of the complaint @ 18% over the amount of damages. ORDER The Opposite Party is directed to pay to the complainants Rs. 1,80,000/-with running interest @ 18% per annum from the date of the complaint i.e. 19.3.1991 till the payment is made, with cost. The cost is quantified at Rs. 3,000/-. The opposite party will pay the said amount within 4 weeks from the date of receipt of this order. Compensation with interest granted with costs.