The Hindu : New Delhi News : Consumer panel directed to hear afresh dispute over cost of flats

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Monday, Jan 14, 2008
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Consumer panel directed to hear afresh dispute over cost of flats

J. Venkatesan

Supreme Court wants it to consider the increase in ground/plinth area and enhanced compensation paid to land owners

NEW DELHI: The Supreme Court has directed the Tamil Nadu State Consumer Disputes Redressal Commission to hear afresh the dispute relating to fixation of the final cost of the Housing Board flats allotted to members of the Sea Shore Apartments Owners Welfare Association, Tiruvanmiyur.

A Bench of Justice C.K. Thakker and Justice P. Sathasivam asked the Commission to consider the increase in the ground/plinth area of the flats and enhanced compensation paid by the Board to land owners. The Bench asked the Board to dispose of the matter, including the question of jurisdiction, by June 30, 2008.

The association members were allotted flats. In August 1994, the Board and the allottees entered into an agreement under which the ultimate cost of the construction would be subject to the compensation to be paid to the land owners. After the allotment, the owners were asked to pay additional amount as per the agreement. The association moved the State Commission, arguing that the demand was excessive. The Commission held that the demand was illegal, and the National Commission upheld the order by dismissing the Board’s appeal.

In its present appeal is directed against the order, the Board contended that the consumer commission did not have any authority or jurisdiction to go into fixation of cost, and that only the civil court could deal with such disputes.

The Bench said: “The intending purchasers were aware of the fact that the final price was to be fixed by the Board. In fact, an agreement to that effect was executed by all prospective allottees wherein they agreed that they would pay the amount which would be finally fixed by the Board.

Writing the judgment, Justice Thakker said: “in these circumstances, it cannot be said that the allottees were not aware of this condition, and they were compelled to make payment, and treated unfairly or unreasonably by the Board.”

On the scope of the commission to entertain such disputes, the Bench, citing an earlier judgment, said that when private undertakings were taken over by the State or its utilities , any attempt to exclude the services offered by such statutory Boards to the common man from the application of the Consumer Protection Act must be discouraged. At the same time, “it could not be overlooked that ‘price fixation’ depends on several factors. Therefore, it would not be appropriate to enter adequacy of price,” it said. The State and National Commissions ought to have considered whether the controversy would be justifiable on the facts and circumstances of the case.

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