Court : National Consumer Disputes Redressal Commission (NCDRC)
Case No : Consumer Complaint No. 3602 of 2017
Judges: THE HONOURABLE DR. INDER JIT SINGH, PRESIDING MEMBER & THE HONOURABLE MR. SHASHI NANDKEOLYAR, MEMBER
Parties : Meera Cooperative Housing Society Ltd., Mumbai, Through the Secretary Versus Maharashtra Housing and Area Development Authority Griha Nirman Bhavan, Kala Nagar, Bandra East Mumbai & Another
Appearing Advocates : For the Complainant: Viraj Kadam, Advocate. For the Opposite Parties: Chirag M. Shroff, Advocate (VC).
1. The present Consumer Complaint (CC) has been filed under Section 21 (a)(i) of the Consumer Protection Act, 1986 by the Complainant against the Opposite Parties (OPs) as detailed above, inter alia praying for the following reliefs:
a) That it be held that the OPs have rendered deficient service to the Complainant within the meaning of the Consumer Protection Act, 1986.
b) That it be held that the OPs have adopted Unfair Trade Practice within the meaning of the Consumer Protection Act, 1986.
c) That the act of downwardly revising the rate of construction from Rs. 13,000/- per square meter to Rs.8,608/- per square meter for constructing the Municipal Market as mentioned in demand letter dated 15th March 2004 be held to be illegal.
d) That it be further held that the amount of Rs.4,68,17,134/- demanded from Complainant vide letter dated 29th March 2017; or any such increased amount on the date of filing of the Complaint; is illegal and thus not payable by the Complainant.
e) That it be held that no amount in whatsoever form or nature or description be demanded by the OPs from the Complainant.
f) That the OPs be directed to refund an amount of Rs. 1,09,50,015/- paid on 11th February 2016 under protest by the Complainant to the OPs towards so-called arrears of principal due; together with interest @18% p.a. from the date of payment to the OPs.
g) That an excess amount of Rs. 12,79,084/- recovered by the OPs from the Complainant which was also forming part of the capitalized amount of annual rent while determining the liability of the Complainant against allotment of plot in question be refunded with interest @18% p.a. from the date on which it was paid.
h) An amount of Rs. 10,00,000/- be directed to be paid towards mental harassment caused to the Complainant.
i) Cost of Complaint of Rs.6,50,000/- be provided.
X j) Any other and further relief which the Hon'ble NCDRC may deem fit in the interest of justice and fair play.
2. Notice was issued to the OPs on 08.01.2018. The OPs filed their Written Version/Reply on 04.04.2018 (after seeking extension of time vide IA/5405/2018). The Complainant filed Rejoinder. Parties filed Evidence by way of Affidavit, and Written Arguments/Synopsis etc. Counsel for the Complainant submitted that although they have made an attempt towards amicable settlement, but it has not worked out and does not seem possible. The case was heard finally on merits on 11.08.2026 when the judgment was reserved, with a direction to both the parties to file updated written notes of arguments which were filed by both the sides on 17.08.2026
3. The factual matrix of the case, as averred in the complaint and supported by documents, is as under:
i) The Complainant is a Cooperative Housing Society duly registered under the Maharashtra Cooperative Societies Act, 1960. The Complainant, vide its application dated 10th May 2000, requested the Government of Maharashtra (GoM) to allot a plot of land on lease for constructing a building for its members.
ii) The GoM directed the OPs to process the application and submit a report.
The OPs submitted a report on 11th September 2000 to the GoM, indicating that the premium for the plot should be Rs.3,226/- per sq.m, and the construction cost for the municipal market to be built by the Society would be Rs.15,488/- per sq.m.
iii) In contravention of their own report to the GoM, the OPs issued an allotment letter dated 20th June 2002, charging a premium of Rs.7,350/- per sq.m. This was followed by another letter dated 28th June 2002, fixing a provisional construction cost of Rs.13,000/- per sq.m, for the municipal market. The Complainant protested these arbitrary rates, which were far higher than those recommended to the GoM.
iv) After sustained deliberations and negotiations between the parties, an Indenture of Lease was executed on 29th June 2002. The Agreement contained the final, crystallized terms. It did not provide for any unilateral revision of rates by the OPs. The Agreement clearly stated that the Complainant had paid the "full price amount of lease premium and lease rent." The total amount paid by the Complainant as per the Agreement was Rs.3,22,35,800/-.
v) The Complainant constructed the Municipal Market at its own cost and handed over its possession to the Brihanmumbai Municipal Corporation (BMC) on 13th May 2005 (Exhibit H). An Occupation Certificate for the housing project was issued by the BMC on 13th May 2005 (Exhibit I), for which the OPs had issued a No Objection Certificate (NOC). The issuance of the NOC by the OPs unequivocally demonstrates that no dues were pending from the Complainant at that time.
vi) Despite the executed Lease Deed and the issuance of NOC, the OPs began raising illegal demands. In a letter dated 1st October 2002, the OPs unilaterally rejected the provisional construction cost of Rs. 13,000/- per sq.m, and demanded a substantial additional amount. The Complainant lodged a strong protest.
vii) Thereafter, by letter dated 15th March 2004, the OPs further revised the construction cost downwards to Rs.8,608/- per sq.m, and demanded a differential amount of Rs. 1,09,50,015/-. The Complainant protested this illegal revision vide letter dated 6th August 2004, reminding the OPs that they were travelling beyond the terms of the executed Agreement, which did not provide for such revisions.
viii) The OPs did not respond for several years, leading the Complainant to believe that the illegal demand had been withdrawn. However, in 2013, the OPs revived the demand with exorbitant compounded interest. This culminated in demand letters dated 19th January 2016 for Rs.5,21,98,591/- and 29th March 2017 for Rs.4,68,17,134/-.
ix) To put an end to the prolonged controversy, the Complainant, under protest, paid the principal differential amount of Rs.1,09,50,015/- on 11th February 2016, while clearly stating that they were not liable to pay any amount. They also sought a refund of this amount. The OPs refused to give up their illegal interest claim, forcing the Complainant to file the present complaint.
4. The OPs in their written version/reply have raised several preliminary objections and contentions, which are summarized as follows:
i) The complaint is not maintainable for want of a mandatory statutory notice under Section 173 of the Maharashtra Housing and Area Development Act, 1976.
ii) The complaint pertains to a pricing issue, and the OPs are not providing any "service" to the Complainant. The agreement is merely a lease of immovable property, hence outside the ambit of the Consumer Protection Act.
iii) The complaint is barred by limitation. The cause of action arose on 15.03.2004, when the first demand for the differential amount was made.
iv) The provisional cost of construction was subject to change, and the lease deed does not mention the Rs.13,000/- per sq.m. rate. The OPs acted in accordance with their policy (Resolution No. 5981 dated 10.11.2003) in fixing the cost at Rs.8,608/- per sq.m.
v) The issuance of NOC to the BMC was a "good deed" and does not imply that no amounts were recoverable.
vi) The Complainant having paid the amount of Rs.1,09,50,015/- cannot claim its refund, as the payment was voluntary, even if made "under protest".
Objections of the OP with regard to the maintainability of complaint:
5.1. Complainant not being a Consumer 5.1.1. Contentions of the Opposite Party It is submitted that the complaint is an abuse of process and amounts to forum shopping, as the complainant has approached this Commission despite the subject matter being beyond the scope of the Consumer Protection Act and the complainant not being a 'consumer'. Accordingly, the complaint is liable to be dismissed at the threshold with exemplary costs.
5.1.2. Response of the Complainant:
It is contended that the Lease Deed dated 29.06.2002 was executed between the Complainant Society and the Opposite Party for valuable consideration, and the Opposite Party provides services relating to allotment, development and management of properties. Its status as a statutory authority does not, by itself, exclude the relationship from the scope of the Consumer Protection Act.
It is further contended that the grievance relates to the subsequent levy and recovery of an amount over and above the agreed consideration, along with consequential interest, constituting unfair trade practice and deficiency in service. The complaint is therefore maintainable under Section 2(c) of the Consumer Protection Act, 1986, including the provision relating to charging a price in excess of the price agreed between the parties.
5.2. Complaint is barred by Limitation:
5.2.1 Contention of the OP It is contended that the complaint is hopelessly barred by limitation. The complainant's grievance arises from the demand letter dated 15.03.2004, whereby the Opposite Party demanded ^1,09,50,015/- towards the principal ^balance amount allegedly payable under the Lease Deed dated 29.06.2002, after adjustment of the construction cost. Since the said demand was not challenged at the relevant time, it attained finality and interest continued to accrue thereon. The subsequent demand letters dated 30.05.2013, 19.01.2016 and 29.03.2017 merely reiterated the earlier demand and did not give rise to a fresh cause of action. Hence, the complaint filed thereafter is barred by limitation.
5.2.2 Response of the Complainant It is contended that present complaint was filed in November 2017. The immediate and operative cause of action for seeking refund arose from the demand dated 19.01.2016 and more particularly, from the Complainant's compelled payment of Rs.1,09,50,015/- under protest on 11.02.2016, followed by further demand of interest dated 29.03.2017. It is further contended that complainant seeks refund of the amount paid under protest together with appropriate interest and consequential relief. The complaint was therefore, instituted within the prescribed period reckoned from the subsequent demand and payment which directly gave rise to the relief claimed.
5.3. Present Complaint is barred under section 173 of the MH AD Act, 1976 for want of 2 months mandatory statutory notice:
5.3.1 Contentions of the OP:
It is contended that Complaint is not maintainable and liable to be dismissed for want of mandatory statutory notice u/s. 173 of the Maharashtra Housing and Area Development Act, 1976. The Complainant ought to have served a two months notice to the opposite party herein prior to instituting the proceedings before this Commission, and in the absence of the same, the complaint is incompetent and deserves to be rejected/ dismissed.
It has been held by the Hon'ble Supreme Court in Ethiopian Airlines Versus Ganesh Narain Saboo, (2011) 8 SCC 539: "The question in this case is whether proceedings before the Consumer Forum are suits. It appears that there are two conflicting judgments on this point - E.I.C.M. Exports Ltd. v. South Indian Corporation (Agencies) Ltd. and Another 2009 (10) SCALE 22 and Patel Roadways Limited v. Birla Yamaha Limited (2000) 4 <§CC 91. Hence we are referring the matter to a larger Bench to resolve this conflict, to be constituted by Hon'ble the Chief Justice of India."
"74. The controversy involved in this case is no longer res- Integra. This Court in Patel Roadways Limited (supra) clearly observed that a proceeding before the Consumer Forum comes within the sweep of term "suit". Again this Court in Economic Transport Organization (supra) reiterated the principle stated in Patel Roadways Limited (supra). Both these judgments have been specifically approved by the Constitution Bench of this Court in Economic Transport Organization (supra). The view which has been taken in E.I.C.M. Exports (supra) is clearly contrary to the view taken by the Constitution Bench judgment in Economic Transport Organization (supra) and the same cannot be sustained.
75. We are of the considered view that the impugned order passed by the National Commission is untenable so far it held that the proceeding before the Consumer Forum does not come within the sweep of term "suit" because it is contrary to the judgment of the Constitution Bench of this court in Economic Transport Organization (supra). The finding of the National Commission is accordingly set aside to that extent. However, we agree with the findings of the National Commission so far as it has remitted the matter to the State Commission for adjudication. In the facts and circumstance of this case, we direct the State Commission to dispose of the case as expeditiously as possible.
5.3.2 Response of the Complainant:
It is contended that The Complainant was not required to issue a prior statutory notice under Section 173 of the MHADA Act before invoking the jurisdiction of this Hon'ble Commission. The consumer remedy is a special statutory remedy and is in addition to other remedies available in law.
Section 3 of the Consumer Protection Act, 1986 expressly provides that the remedy under the Consumer Protection Act is in addition to and not in derogation of the provisions of any other law for the time being in force. The requirement of a statutory notice applicable to a civil action cannot therefore, be mechanically imported so as to defeat the special remedy created under the Consumer Protection Act.
The Hon'ble Supreme Court in Ethiopian Airlines v. Ganesh Narain Saboo, (2011) 8 SCC 539, has recognised that a statutory notice requirement applicable to a civil proceeding does not necessarily govern a consumer complaint instituted under the special consumer legislation. The consumer jurisdiction is intended to provide an additional and efficacious remedy and Cannot be defeated by importing a procedural requirement which the Consumer Protection Act does not prescribe.
5.4. Present Complaint pertains to the pricing issue of the cost of construction and also lease charges for the land given on lease by the OP.
5.4.1. Contentions of the OP:
It is contended that present complaint is not maintainable and liable to be dismissed as the same pertains to pricing issue of the cost of construction and also lease charges for the land given on lease by the OPs to the complainant and the OPs have not rendered any "service" as defined in section 2(1 )(o) of the Act. It is a well settled law that the pricing issue falls within the prerogative of the Statutory Authorities as per the State policies and Regulations and the courts do not interfere in such pricing policy matters. Further, the Opposite parties have not provided any services to the complainant but has only given a piece of land on lease and charged lease rent and premium for the same. As the complainant failed to make the payments on time, the Opposite parties have levied interest thereon. The present dispute by no stretch of imagination can fall within the ambit of consumer law. There are ample judgements of the Hon'ble Supreme Court and this Commission to this effect. It is categorically submitted that the OPs have neither rendered deficient service to the complainant nor are they guilty of Unfair Trade Practice under the Consumer Protection Act. Hon'ble Supreme Court has held in UT Chandigarh Admn. v. Amarjeet Singh, (2009) 4 SCC 660 : (2009) 2 SCC (Civ) 273 at page 671 that where existing sites are put up for sale or lease by public auction by the owner, and the sale/lease is confirmed in favour of the highest bidder, the resultant contract relates to sale or lease of immovable property. There is no hiring or availing of services by the person bidding at the auction. Nor is the seller or lessor, a trader who sells or distributes "goods". The sale price or lease premium paid by the successful bidder of a site, is the consideration for the sale or lease, and not consideration for any service or for provision of any amenity or for sale of any goods. It is submitted that the present complaint is not maintainable and liable to be dismissed as the same pertains to pricing issue pertaining to lease charges, interest on unpaid charges and the cost of construction for the land given on lease by the OPs to the complainant society. It is a well settled law that the pricing issue falls within the prerogative of the Statutory Authorities as per the State policies and Regulations. In the present matter, the demand by MHADA is under regulation no. 16 of the Maharashtra Housing and Area Development (Allotment of Land) Regulations 1982 and other allied laws.
5.4.2 Response of Complainant It is contended that the central illegality lies in the subsequent downward revision of the construction cost. The rate of ?13,000/- per sq. metre formed the basis for computing the premium payable by the Complainant and for execution and registration of the Lease Deed. After the parties had acted upon the arrangement, the Opposite Party could not unilaterally alter its basis.
By letter dated 01.10.2002, the Opposite Party departed from the allotment and Lease Deed by denying adjustment of the construction cost and demanding the entire construction cost of 3,49,18,130/- within 30 days, without any fresh consent of the Complainant. Thereafter, by letter dated 15.03.2004, it further reduced the construction cost from ?13,000/- to ?8,608/- per sq. metre and raised a differential demand of 1,09,50,015/-, which was promptly protested by the Complainant vide letter dated 06.08.2004.
Thus, while ?13,000/- per sq. metre was adopted for determining the financial terms at allotment and execution of the Lease Deed, a lower rate was retrospectively introduced to create an additional liability. Such unilateral alteration is legally unsustainable, and the Opposite Party is bound by the concluded arrangement and estopped from taking a position contrary to the terms acted upon by the Complainant. The Complainant had also constructed the Municipal Market and handed it over to BMC free of cost; having accepted 'such performance, the Opposite Party could not retrospectively rewrite the financial terms.
5.5 Demand letters dated 30.05.2013,19.01.2016 and 29.03.2017 cannot be challenged without challenging the main demand letter dated 15.03.2004 5.5.1 Contentions of the OP:
It is contended that the Complainant has deliberately omitted in para 13 of the complaint the first demand dated 15.03.2004. The subsequent demand letters dated 30.05.2013, 19.01.2016 and 29.03.2017 merely add interest on the unpaid principal amount and, therefore, cannot be challenged without challenging the original demand dated 15.03.2004.
It is further contended that although the Complainant stated in para 13 that the complaint was within two years of the cause of action, it simultaneously reserved the right to seek condonation of delay, thereby demonstrating its knowledge that the complaint was hopelessly time-barred. Since the main demand dated 15.03.2004 has not been challenged, the complaint is liable to be dismissed on the ground of limitation as well as for failure to challenge the foundational demand.
5.5.2 Response of the Complainant:
It is contended that the demand for additional premium first arose vide letter dated 15.03.2004, and the Opposite Party was thus aware of the alleged liability from that date. The Occupation Certificate was issued by the Municipal Corporation on 13.05.2005, evidencing completion of the Complainant's contractual performance. If the additional amount was legally due, the Opposite Party was required to take appropriate proceedings within the prescribed limitation and could not keep a stale monetary claim alive by issuing subsequent demands.
The subsequent demand dated 19.01.2016 for ?5,21,98,591/- could not create a fresh cause of action or extend/revive limitation. The Complainant's payment of ?1,09,50,015/- on 11.02.2016 was expressly made under protest and did not constitute an admission or acknowledgment of liability, Consequently, the subsequent demand dated 29.03.2017 for interest of ^4,68,17,134/- was also unsustainable, the underlying demand having become stale and disputed. The principle that a time-barred liability cannot be resurrected through subsequent recovery action is recognised in State of Kerala v. V.R. Kalliyanikutty, (1999) 3 SCC 657.
The claim for interest is consequential and cannot survive independently of a legally enforceable principal liability. When the principal demand itself is disputed, unsupported by the concluded contractual terms and barred by limitation, the Opposite Party cannot create an independent right to recover interest for the period during which the alleged principal remained neither admitted nor lawfully adjudicated as payable.
In the present case, the first demand was raised on 15.03.2004. The Complainant protested the demand on 06.08.2004. No lawful basis has been demonstrated for permitting the Opposite Party to wait for years and thereafter claim interest on the alleged principal for the entire intervening period. The demand of interest dated 29.03.2017 for 4,68,17,134/- is therefore liable to be rejected.
The payment of the principal amount on 11.02.2016 cannot alter the position because it was expressly made under protest. The payment was made to protect the Complainant's interest and cannot be converted into an admission of the Opposite Party's entitlement to interest. In particular, it cannot retrospectively validate a demand which was otherwise not enforceable.
I 6. Besides the contention of the OP with regard to the maintainability of the complaint on various grounds and response of Complainant thereon, which have been given in para 5, the parties in their detailed notes of arguments have submitted as follows:
6.1 Submissions of OPs
(i) The Maharashtra Housing & Area Development Authority (MHADA), OP no. 1 is a statutory Authority and has been established by the Maharashtra Housing and Area Development Act, 1976. It came into existence on Sth December 1977. It undertakes construction of residential buildings under various housing schemes for different sections of the society, LIG, MIG and HIG so as to effectively subserve the public purpose of providing, inter-alia additional housing stock according to policy requirements of the Government of Maharashtra.
(ii) That the Complainant vide its application dated 10th May 2000 requested the Government of Maharashtra to allot a plot of land on lease for the purposes of constructing, maintaining, allocating the building for its members for the use and occupation.
(iii) That the Government of Maharashtra vide letter dated Sth June 2000 directed the OPs to process the said application of the complainant dated 10th May 2000 and submit a report.
That accordingly the OPs submitted a report to the Government of Maharashtra vide letter dated 11th September 2000 in which details of the size, construction cost and conditions for the allotment of the plot was made available.
(iv) That as per the report, the construction was to be done on the 6822 Sq. mt. plot and the construction cost was fixed initially at Rs 15,488/- per sq.mt. That as per the report, the plot was to be allotted to the complainant subject to certain terms and conditions, such as x'
a) That the Complainant would construct a municipal market on their own which would be handed over to the Brihanmumbai Municipal Corporation (BMC) free of cost.
b) That the complainant would pay premium for the entire plot of 6822 Sq.mt @ Rs.3226/- per Sq.mt and the expenditure incurred by the complainant in constructing the market would be set-off against the premium to be paid.
c) Annual rent of 2.5 & of the premium to be paid by the complainant.
(v) That the OPs vide letter dated 20.06.2002 to the complainant stated that under regulation number 16 of the Maharashtra housing and area development (allotment of land) regulations 1982, the plot bearing area of 6952.70 sq.mt was being allotted to the complainant at the provisional/ tentative rate of 7,350/-per Sq.mt.
(vi) That it is pertinent to mention that the Premium rate at Rs.7350/- per sq.mt. was derived & levied to Meera Cooperative housing Society on the basis of MHADA's pricing policy framed vide MHADA Resolution No.3094, dated 16/11/1992 duly incorporating cost of development & some incidental charges.
(vii) That the OPs vide letter dated 28.06.2002 intimated the complainant the revised amount payable by the complainant which is as under:-
a) Area of plot 6961 Sq.mt.
b) Premium on the plot Rs.7350/-per Sq.mt.
c) Provisional construction rate Rs. 13,000/- per Sq.mt.
(viii) That it is pertinent to mention that the provisional rate of construction was set as Rs. 13,000/-per Sq.mt as it was already accepted for some society in similar nature of work. Also the changed premium cost @ Rs.7350/-per Sq.mt. and provisional construction rate Rs. 13,000/- per Sq.mt. was accepted by the Complainant as the complainant paid the amount vide Receipt no. 126842, dated 29/06/2002.
(ix) That in letter dated 28.06.2002 from the OPs to the Complainant, an amount of Rs.12,79,084/- was computed as lease rent for one year.
Accordingly lease for 30 years duly capitalized worked out to Rs. 1,59,88,550/- & communicated to the society vide letter dated 28/06/2002, however erroneously one year lease amount of Rs.12,79,084/- was added while totaling the demanded amount. Thus the total amount to recovered from the Complainant worked out to Rs.3,09,56,730/-instead of the amount communicated earlier, i.e. Rs.3,22,35,800/-.
(x) That the OPs and the Complainant entered into a lease agreement containing the revised terms and conditions and the same was executed on 29.06.2002. That as per the lease agreement the land admeasuring 6961 Sq.mt in S.No. 41 (part), Plot No. A-15 at Oshiwara, Jogeshwari (West) was allotted and the payment of premium was fixed @ Rs.7350/-per Sq.mt. for the areas admeasuring 6961 Sq.mt., lease rent of Rs. 12,79,084/- per annum and nominal rent of Rs.30/-@ Rs. 1 per year for 30 years. That it is relevant to mention that the provisional cost of construction of the municipal market i.e. Rs. 13,000/- per Sq.mt. was not mentioned in the lease agreement duly executed between the parties.
(xi) That OPs vide letter dated 01.10.2002 intimated the Complainant that the provisional construction cost of Rs.13,000/- per sq.mt. was rejected by the OP No. 2 Board at its meeting held on 03.09.2002 and therefore no amount would be set off against the premium to be paid on the plot allotted. Accordingly the total amount due from the complainant worked out to Rs. 6,71,53,930/- and since the complainant had paid Rs. 3,22,35,800/-, the balance amount to be payable by the complainant was Rs. 3,49,18,130/- within 30 days from the receipt of the said letter.
(xii) That the OPs did not travel outside the terms and conditions of the lease agreement, as the Complainant has misrepresented the fact that the cost of construction the Municipal Market was frozen at Rs.13,000/- per Sq.mt, as the complainant was aware that the Cost of Construction of the market was only provisional and the lease deed duly executed between the parties does not mention the cost of construction to be at Rs.13,000/- per Sq.mt. as it only mentions the payment of premium fixed @ Rs.7350/-per Sq.mt. for the areas admeasuring 6961 Sq.mt., lease rent of Rs. 12,79,084/- per annum and nominal rent of Rs.30/-@ Rs. 1 per year for 30 years. The present complaint should therefore be dismissed on this count as well.
(xiii) That it is relevant to mention that the land admeasuring 6961 Sq.mt in S.No. 41 (part), Plot No. A-15 at Oshiwara, Jogeshwari (West) allotted to Complainant was reserved for "Municipal Retail Market & this fact was known to the Complainant and the Complainant was going to get benefit in terms of additional FSI after handing over of constructed market free of cost to Municipal Corporation. Considering the said position, the OPs rejected the exemption to be given to society on account of handing over the constructed Municipal Market to Municipal Corporation Mumbai free of cost.
Provisional construction cost of Rs.13,000/- per sq.mt.
(xiv) That the OPs vide letter dated 15.03.2004 to the Complainant stated that against the provisional construction cost of Rs. 13,000/- per Sq.mt., the OPs had approved a rate of Rs. 8,608/- per Sq.mt. and the total amount due from the Complainant was computed as Rs. 4,31,85,815/-. That, after adjusting the amount paid by the Complainant, an amount of Rs. 1,09,50,015/- was demanded by the OPs which was directed to be paid within 30 days of receipt, failing which, the said amount was payable with interest @ 13.5% p.a. Resolution No.5981 dated 10/11/2003
(xv) That the OPs vide Resolution no.5981, dated 10/11/2003 had resolved policy in respect of reserved plot in MHADA layout where allottee societies are required to construct the building for specific reservations and to be handed over free of cost a rebate at Rs.800/- per sq.ft, (i.e. Rs.8,608/- per Sq.mt.) from land cost is to be given. Accordingly, rebate at Rs.8,608/- per sq.mt. towards construction cost of Retail Market to the tune of Rs.2,39,68,115/- is given to the Complainant vide letter dated 15.03.2004.
(xvi) That the Complainant handed over the Municipal Market to the BMC on 13.05.2005. That it is pertinent to mention that the rebate given to the complainant was at Rs. 800/- per sq.ft, (i.e. Rs.8,608/- per Sq.mt.) and not at Rs. 13,000/- Sq.mt. which is evident from the letter sent by the OPs to the Complainant on 15.03.2004. That the Complainant handed over the Municipal Market in 2005 and was fully aware of the fact that the rebate was at Rs.8,608/- per Sq.mt. in 2004.
(xvii) That NOC was issued by the OPs vide letter dated 21.09.2004 to the Executive Engineer, Building Proposal Dept. (W.S.) Municipal Corporation of Greater Mumbai for the grant of Occupation Certificate for the building on the plot admeasuring 6,691 Sq.mt. That in the said letter the OPs also mentioned that the B.C.C should not be granted as the Complainant had to complete the formalities of rectification of lease deed. The grant of NOC by MHADA does not mean that no amounts are recoverable from the complainant society.
(xviii) That the OPs vide demand letter dated 15.03.2004 duly intimated the Complainant that an amount of Rs. 1,09,50,015/- was due. That since the Complainant did not make the payment of the due amount, the OPs vide letter dated 30.05.2013 reminded the Complainant that an amount of Rs. 3,42,27.680/- was due and payable by the Complainant which included the principal overdue of Rs. 1,09,50.015/- and the balance being calculated @13.5% compounded annually.
(xix) That the OPs vide demand letter dated 19.01.2016 again informed the Complainant that since the Complainant did not make the payment, the interest @ 13,5 % had been charged for the delayed period and an amount of Rs. 5,21,98,591/- was due which included the principal amount of Rs. 1,09,50,015/- with the interest at the rate of 13.5% for the period of delay which aggregates to Rs. 5,00,45,502/- and the cost of the construction of the protection wall i.e. Rs. 5,07,804/- along with the interest at the rate 13.5% for the period of 1992-93 to 2015-2016 which aggregates to Rs. 21,53,089/-.
(xx) That the Complainant paid Rs. 1,09,50,015/- on 11.02.2016, from the aggregate due amount of Rs. 5,21,98,591/- payable to the OPs. At this stage it is pertinent to mention that the act of payment being made further suggests that the complainant has given up its objections.
(xxi) That the OPs vide demand letter dated 29.03.2017 intimated the Complainant that the remainder amount of Rs. 4,68,17,134/- which included the cost of the protection wall construction and interest as well as outstanding amount was still due and payable, which may be paid immediately as in the meeting of the Public Accounts Committee held on 13.02.2007, the committee had regretted about the non-payment of the amount on the Complainants part and had given directions to pay the amount instantly.
(xxii) A similar demand was raised by the OPs vide letter dated 05.12.2017 as well.
(xxiii) The plot bearing area of 6952.70 sq.mt was allotted to the complainant at the provisional rate of 7,350/-per Sq.mt. That it is pertinent to mention that the Premium rate of Rs.7,350/- per sq.mt. was derived & levied on Meera Cooperative housing Society on the basis of MHADA's pricing policy framed vide MHADA Resolution No.3094, dated 16/11/1992 duly incorporating cost of development & some incidental charges.
6.2. Submissions of Complainant T(i) The Complainant was allotted the plot admeasuring approximately 6,961 sq. metres upon the express understanding that 40% of the plot would be utilised for construction of a Municipal Market, which market was to be handed over to the BrihanMumbai Municipal Corporation ("BMC") free of cost, and that the cost of such construction was to be adjusted against the premium payable for the plot. The Complainant duly acted upon the allotment, constructed the Municipal Market and handed over the same to BMC, and thereafter the residential building was completed and occupied by the members of the Complainant Society.
(ii) The material documents placed on record demonstrate that the financial arrangement was considered by the competent authorities before the allotment, was expressly worked out in the allotment correspondence, and was thereafter incorporated in the Lease Deed dated 29.06.2002. The Opposite Party subsequently attempted to depart from that concluded arrangement, first by its letter dated 01.10.2002 and thereafter by the demand dated 15.03.2004, by reducing the construction cost from ^13,000/- per sq. metre to ?8,608/- per sq. metre and demanding a further amount of ^1,09,50,015/-. The Complainant immediately protested against the said demand. The principal amount was eventually deposited on 11.02.2016 strictly under protest, and the Opposite Party thereafter raised a further demand of ?4,68,17,134/- towards interest by its letter dated 29.03.2017.
(iii) The Complainant submitting further that the present dispute arises from the subsequent and wholly untenable attempt of the Opposite Party to reopen, revise and retrospectively alter the financial terms upon which the plot was allotted to the Complainant and the Lease Deed dated 29.06.2002 was executed. The entire controversy, therefore, has to be examined against the contemporaneous record and the settled legal principles governing concluded contractual arrangements, retrospective financial burdens, limitation and the jurisdiction of this Commission.
Validity and Legality of the Allotment
(iv) The allotment in favour of the Complainant was made under Regulation 16 of MHADA. The said Regulation empowered the Opposite Party to allot land upon such terms and conditions as may be prescribed. The allotment was, therefore, an exercise of statutory authority and was not an allotment made without jurisdiction or contrary to the governing regulations.
(v) The validity of Regulation 16 was challenged before the Bombay High Court and thereafter before the Hon'ble Supreme Court. The Hon'ble Supreme Court, in JVPD Scheme Welfare Trust v. Chief Officer, MHADA, 2019 INSC 491, upheld the validity of Regulation 16. The very statutory provision under which the present allotment was made has thus received judicial recognition.
(vi) There is consequently no basis for any suggestion that the Complainant obtained a special concession or secured a "back-door entry" to the plot. The allotment was made by the competent statutory authority under the applicable regulatory framework and was accompanied by substantive obligations imposed upon the Complainant, including the obligation to construct the Municipal Market over 40% of the plot and hand over the same to BMC free of cost.
(vii) The Complainant not only accepted those conditions but performed them. Having accepted the benefit of the allotment and having received the benefit of the Municipal Market constructed and handed over by the Complainant to BMC, the Opposite Party cannot now seek to undermine the allotment by retrospectively altering the financial terms upon which the allotment was made.
The contemporaneous record establishes the agreed basis of premium and construction cost
(viii) The contemporaneous record is of decisive significance. On 10.05.2000, the Complainant requested allotment of plot A-15 in Survey No. 41, Oshiwara, MHADA Colony, Mumbai, admeasuring approximately 6,952.7 sq. metres. On 05.06.2000, the Government of Maharashtra directed the Opposite Party to process the allotment and submit its feasibility report.
(ix) The MHADA report dated 11.09.2000 proposed premium of ?3,226/- per sq. metre and construction cost of ^15,488/- per sq. metre. Thereafter, by the allotment letter dated 20.06.2002, the premium was fixed at f7,350/- per sq. metre. On 28.06.2002, the Opposite Party itself worked out the financial terms by taking the premium at ?7,350/- per sq. metre and the cost of the market at ?13,000/- per sq. metre for 40% of the plot area, resulting in the net premium payable after adjustment of construction cost.
(x) The computation contained in the Opposite Party's letter dated 28.06.2002 is particularly material. The premium component was calculated at ?5,11,63,350/-; the construction cost for the Municipal Market, calculated on 40% of the plot area at ^13,000/- per sq. metre, was ?3,61,97,200/-; and the resulting premium payable was f1,49,66,150/-. The Complainant thereafter paid the amount of ?3,22,35,800/- as recorded in the contemporaneous record.
(xi) The Lease Deed dated 29.06.2002 was thereafter executed for a period of 30 years. The Lease Deed expressly records the premium and, when read with the immediately preceding allotment correspondence and the agreed computation, gives effect to the adjustment of the construction cost of the Municipal Market against the premium. The resulting figure of ?1,49,66,150/- could only have been arrived at on the basis of the agreed construction-cost component of 3,000/- per sq. metre. The Opposite Party, subsequently, in their communications or demand notices, never asked the Complainant to furnish or demanded their cost of construction. If the Opposite Party wanted to revise the cost, they should have asked for cost of construction from the Complainant.
(xii) Thus, the contractual arrangement cannot be examined by isolating one expression or one subsequent communication. The allotment letter, the computation dated 28.06.2002, the payment made by the Complainant and the Lease Deed dated 29.06.2002 constitute the contemporaneous chain of documents which evidences the financial terms upon which the parties acted.
The Opposite Party could not unilaterally revise the construction cost after execution of the lease deed
(xiii) The central illegality in the present case lies in the subsequent downward revision of the construction cost. The construction cost of ?13,000/- per sq. metre formed the basis upon which the premium payable by the Complainant was computed and the Lease Deed was executed. Once the parties had acted upon that arrangement and the Lease Deed had been executed and registered, the Opposite Party could not, by a subsequent unilateral communication, alter the very basis upon which the consideration had been determined.
(xiv) The letter dated 01.10.2002 is itself a complete departure from the arrangement reflected in the allotment and Lease Deed. By that letter, the Opposite Party purported to deny adjustment of the construction cost and demanded the entire construction cost of ^3,49,18,130/- within 30 days. This unilateral departure was not founded upon any fresh consent of the Complainant and could not override the terms already acted upon by the parties.
(xv) The subsequent demand dated 15.03.2004 went still further. The Opposite Party reduced the construction cost from 3,000/- per sq. metre to ?8,608/- per sq. metre and, on that basis, demanded the differential amount of ^1,09,50,015/-. The Complainant promptly protested against this downward revision by its letter dated 06.08.2004.
(xvi) The Opposite Party's own conduct is therefore inconsistent: the rate of ?13,000/- per sq. metre was used for arriving at the financial terms at the time I* of allotment and execution of the Lease Deed, whereas a substantially lower rate was subsequently introduced for the purpose of creating an additional liability. Such retrospective alteration of the basis of computation, after the transaction had been concluded and acted upon, is legally unsustainable.
(xvii) The Opposite Party is bound by the terms of the concluded arrangement and is estopped from adopting a position inconsistent with the terms upon which the Complainant altered its position and performed its obligations. The Complainant had constructed the Municipal Market and handed it over to BMC free of cost. It is impermissible for the Opposite Party, after accepting that performance, to retrospectively rewrite the financial terms.
The retrospective application of resolution no. 5981 dated 10.11.2003 is impermissible (xviii). The Opposite Party seeks to rely upon Resolution No. 5981 dated 10.11.2003, as referred to at page 49 of the Written Version, for imposing a financial liability upon the Complainant in respect of a transaction which had already been concluded by the Lease Deed dated 29.06.2002. The resolution is subsequent by more than a year to the execution of the Lease Deed and cannot, in the absence of clear authority in law, be employed to retrospectively alter an existing contractual arrangement.
(xix). A policy decision or administrative resolution which creates an additional financial burden upon persons whose rights and obligations have already crystallised cannot ordinarily be given retrospective operation so as to unsettle completed transactions. A subsequent resolution may operate prospectively in accordance with law; it cannot be utilised as an instrument for reopening concluded contracts and creating liabilities which did not exist on the date of the transaction.
(xx) The principle has been recognised by the Hon'ble Supreme Court in Kusumam Hotels (P) Ltd. v. Kerala State Electricity Board, (2008) 13 SCC 213, where the Court considered the limits upon the retrospective withdrawal of financial concessions and the consequences for persons who had acted upon the earlier position. The principle is particularly apposite where, as in the present case, the Complainant had already acted upon the allotment, incurred expenditure, constructed the Municipal Market and completed the transaction before the subsequent resolution was brought into existence.
(xxi) . The issue is therefore not whether the Opposite Party could formulate a policy for future transactions; the issue is whether Resolution No. 5981 dated 10.11.2003 could be employed retrospectively to impose an additional liability upon the Complainant in respect of a Lease Deed executed on 29.06.2002. Such retrospective application is impermissible and the additional demand founded thereon is liable to be rejected.
The demand of ,09,50,015/- has no sustainable basis and is contrary to the agreed price (xxii) The additional demand of ^1,09,50,015/- is not a mere arithmetical correction. It is the direct consequence of altering the construction-cost component from ?13,000/- per sq. metre to ^8,608/- per sq. metre after the transaction had already been concluded. The Opposite Party must, therefore, establish a clear contractual or statutory authority for such alteration. No such basis can be derived from the concluded Lease Deed merely by issuing a subsequent demand letter.
(xxiii) The Consumer Protection Act, 1986 specifically treats as a complaint a situation where a trader or service provider charges for goods or services a price in excess of the price fixed by law or, materially for the present case, the price agreed between the parties. The present dispute falls squarely within that statutory protection because the Opposite Party seeks to impose a financial liability in excess of the financial arrangement upon which the parties had acted and which stood reflected in the Lease Deed and contemporaneous documents.
(xiv) The demand is thus liable to be tested against the agreed contractual terms and not merely against a subsequent internal determination of the Opposite Party. A statutory authority is not exempt from the requirement of fairness, reasonableness and adherence to the terms governing the transaction merely because the demand emanates from an authority.
7. Heard learned counsels for both sides.
8. The main issues for consideration in this case are:
(i) the maintainability of the complaint on grounds of limitation and the bar of Section 173 of the MHADA Act;
(ii) whether the Complainant is a 'consumer' and the OPs are providing a 'service';
(iii) whether the unilateral revision of the construction cost by the OPs from Rs. 13,000/- to Rs.8,608/- per sq.m, after the execution of the final Lease Deed amounts to deficiency in service and unfair trade practice;
(iv) whether the demand for compounded interest at 13.5% p.a. on the differential amount is justified;
(v) whether the Complainant is entitled to a refund of the amount paid under protest along with the erroneously recovered ground rent; and
(vi) the compensation payable.
9. It is contended by the Complainant that the Lease Deed executed on 29.06.2002 is a complete and final contract between the parties, which supersedes all previous allotment letters. The OPs have no right under the Lease Deed to unilaterally revise the rates. The OPs' action of demanding additional amounts based on their internal resolution (No. 5981) is illegal and amounts to deficiency in service. The OPs' conduct has caused mental agony and financial hardship to the Society and its members. The cause of action is continuing, as the OPs continue to demand illegal amounts. The Complainant relies on the fact that the OPs issued an NOC for the Occupation Certificate, confirming that all dues were cleared.
10. The OPs on the other hand contend that the cost of construction was always "provisional" and subject to final determination by the Authority. The Lease Deed does not mention the Rs.13,000/- rate, and therefore, the OPs were well within their rights to apply the policy resolution dated 10.11.2003. The OPs argue that the Complainant acquiesced to the demands by making the payment and is now trying to unjustly enrich itself.
11. We have given a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, and the documentary evidence on record.
11.1 On the preliminary objection raised by the OPs regarding maintainability under Section 173 of the MHADA Act, we find it to be devoid of merit. The Hon'ble Supreme Court in the case of Ethiopian Airlines v. Ganesh Narain Saboo, (2011) 8 SCO 539, held that proceedings before a Consumer Forum are considered as "suits" for the purpose of the Limitation Act. However, the complaint under the Consumer Protection Act is not a "suit" in the strict sense and is a special remedy. Even if Section 173 is applicable, the purpose of the notice is to give the statutory authority an opportunity to settle the matter. In the present case, the Complainant has been in continuous correspondence with the OPs since 2002, protesting the demands. The OPs have not been taken by surprise and have been fully aware of the dispute. The objection is a technical one and is rejected. The Act is a beneficial legislation, and its provisions should be interpreted liberally to advance the cause of consumer protection.
11.2 The preliminary objection regarding the Complainant not being a 'consumer1 is also rejected. The Complainant, a Cooperative Housing Society, hired the services of the OPs (a statutory development authority) for the development/allotment of a plot of land for residential purposes. The Supreme Court in LDA v. M.K. Gupta, (1994) 1 SCC 243 held that the activities of a statutory authority in allotting and developing land fall within the ambit of "service". The relevant observations are as follows:
"6....Similarly when a statutory authority undertakes to develop land and frame housing scheme, it, while performing statutory duty renders service to the society in general and individual in particular.
A person who has paid consideration for allotment of a plot or a house is a consumer, and the authority providing such amenities is rendering a "service". The OP's argument is an attempt to exclude the Complainant from the purview of the Act, which is not sustainable.
11.3 The objection regarding limitation is also not tenable. The OPs have raised a series of demands, starting from 2002, then 2004, then 2013, 2016, and 2017, each giving rise to a fresh cause of action. A continuing cause of action is established when the OPs persist in their illegal demands.
11.4 On the core issue of deficiency in service and unfair trade practice, the conduct of the OPs is questionable. The OPs, in their report to the Government on 11.09.2000, recommended a premium of Rs.3,226/- per sq.m, and a construction cost of Rs.15,488/- per sq.m, for the municipal market. However, in their subsequent communications, they increased the premium to Rs.7,350/- per sq.m, and reduced the construction cost to Rs.13,000/- (provisional) and later to Rs.8,608/- per sq.m. This was done solely to increase the net amount payable by the Society.
11.5 The most crucial aspect is the execution of the Indenture of Lease on 29.06.2002. This is a registered document which supersedes all prior negotiations and offers. The Lease Deed clearly states that the Complainant had paid the "full price amount of lease premium and lease rent." It does not contain any clause empowering the OPs to unilaterally revise the rates or demand additional amounts for the construction of the municipal market. The OPs, having executed a final and binding contract, are estopped from challenging its terms.
11.6 The argument of the OPs that the Rs.13,000/- rate was "provisional" and not mentioned in the Lease Deed cannot be accepted. It was the OPs who had made the rate provisional in their letter dated 28.06.2002. The Complainant protested this uncertainty, and it was only after the OPs agreed to freeze the rates that the final Lease Deed was executed. The OPs cannot be allowed to revert to the "provisional" nature of the rates after having entered into a final agreement that does not reserve such a right. Their conduct amounts to gross deficiency in service and an unfair trade practice.
11.7 The OPs' action of issuing an NOC to the BMC for the Occupation Certificate is a clear admission that all dues, as per the final agreement, were paid. It is an accepted principle that if a statutory authority like MHADA issues an NOC for an occupation certificate, it is a representation that there are no outstanding dues against the property. The OPs cannot now argue that there were outstanding amounts. Furthermore, the OPs' own letter dated 29.03.2017, referencing the Public Accounts Committee's observations, indicates that there were administrative lapses on the part of the OPs in pursuing the recovery.
11.8 The OPs' claim that the payment of Rs.1,09,50,015/- made by the Complainant was "voluntary" is baseless. The Complainant made the payment "under protest" and clearly stated that they were not liable to pay the amount. It was a coercive demand. The Complainant has sought the refund of this amount, which they were never legally obligated to pay.
11.9 Insofar as the compensation and refund are concerned, the OPs are liable to refund the entire amount of Rs. 1,09,50,015/- paid under protest by the Complainant. Additionally, the Complainant has claimed that the OPs erroneously included an amount of Rs. 12,79,084/- towards ground rent in the total computation, even after capitalizing the same. This was a clear accounting error and the OPs have admitted to it in their written version. The same should also be refunded to the Complainant.
12. For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, the Consumer Complaint is allowed with the following directions/reliefs:
(i) We hold that the OPs have rendered deficient service and adopted unfair trade practice. The unilateral revision of the construction cost from Rs.13.000/- per sq.m, to Rs.8,608/- per sq.m, and the subsequent demand for the differential amount and interest are not justified.
(ii) Hence, the demand for Rs.4,68,17,134/- vide letter dated 29.03.2017, and all such similar demands, are not payable by the Complainant.
(iii) The OPs are directed to refund the amount of Rs.1,09,50,015/- (Rupees One Crore Nine Lakh Fifty Thousand Fifteen Only), which was paid under protest by the Complainant on 11.02.2016, to the Complainant.
(iv) The OPs are directed to refund the erroneously recovered amount of Rs.12,79,084/- (Rupees Twelve Lakhs Seventy Nine Thousand Eighty Four Only) towards ground rent, which was included in the total amount despite being capitalized.
(v) For the above-mentioned amounts ordered to be refunded, the OPs shall pay simple interest at the rate of 6% per annum from the date of their respective payments (i.e., from 11.02.2016 and 29.06.2002, respectively) until the date of actual refund.
(vi) The payments in terms of this order shall be made within two months from today, failing which total amounts payable as per this order at the end of two months shall carry interest @ 9% p.a. per annum until the date of actual payment.
(vii) Parties to bear their respective legal costs.
13. The pending lAs, in the Consumer Complaint, if any, also stand disposed off.
