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The issue as to whether a change in the cost would need to be considered in awarding of damages in a consumer dispute, was examined by the NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI, before a bench consisting of Hon’ble Chief Justice and Justice Mohan Lal, Judge, in the matter of Delhi Development Authority vs. Krishan Gupta & Ors. [FIRST APPEAL NO. 1552 OF 2016], on 01.12.21.

The facts of the case were that the appellant had floated nine self-finance schemes (SFS Schemes) for allotment of flats at various locations in Delhi. The Second SFS Scheme, 1978 was floated in December, 1978. The complainant contended that he had deposited the requisite registration amount of ₹10,000/- vide a receipt dated 22.12.1978. Pertinently, as per Clause 13 of the second SFS Scheme, “those once registered will continue to remain registered, if they have not opted for any scheme or unless registration deposit paid by them is withdrawn.”

Subsequently, appellant, in June, 1987, issued brochure giving tentative cost of flats under First SFS Scheme to Sixth SFS Scheme for various floors ranging from ₹1,70,000/- till ₹3,18,000/-. The maximum tentative price of the flat was declared to be ₹3,18,000/- for second floor at Kalkaji, New Delhi, which was inclusive of terrace floor and car garage.

It is the case of the complainant that he kept on enquiring by personal visits or via telephone from the appellant about the status of allotment of flats under the said scheme, but his efforts were gone to no avail. It was only on 15.01.1990, appellant gave advertisement announcing release of 600 flats under the SFS scheme in Times of India. However, by this time appellant had floated Third, Fourth and Fifth SFS Scheme. The registrants of Third, Fourth and Fifth Scheme were allowed to apply whereas the registrants of First and Second SFS Scheme were denied such opportunity. complainant alleges that such act of the appellant was arbitrary and it was without any sum and substance to overlook the registrants of First and Second SFS Scheme. The appellant launched several schemes and advertised the same in different newspapers, but despite repeated attempts to communicate by the complainant, and representations and objections to exclusion, the appellants afforded no reply or opportunity of allotment to the complainants.

The complainant filed application under the Right to Information Act, 2005 on 07.06.2007 seeking reasons as to why no reply has been afforded to the complainant and seeking status of his registration. In reply to the RTI application in July, 2007, it was simply stated that all the schemes have been closed during 2002. complainant aggrieved by such arbitrary decisions of the appellant, again filed representation before the Vice Chairman of the appellant, and, again no reply was warranted to the complainant.

Left with no other legal recourse, complainant filed a complaint before the Delhi State Consumer Disputes Redressal Commission (State Commission) being registered as Consumer Complaint no 42 of 2008, praying that the DDA be directed to discontinue the unfair and restrictive trade practices and be prevented from repeating them, and further, that the flat of the complainant’s choice in the locality desired, at the price as per the SFS be allotted to the complainant, in the alternative of which a compensation of ₹40,00,000/- be paid to the complainant. Additionally, the complainant prayed for an amount of ₹20,00,000/- to be paid towards the damages for deficiency of service, manipulation of conditions of delivery of service, deprivation, mental agony, torture and harassment caused in addition to the costs of litigation and punitive damages.

The State Commission directed the appellant to allot the complainant a flat of category III preferably, and if category III was not available then category II flat in Dwarka or Rohini or North Delhi along with compensation of ₹5,00,000/- and in the alternative Opposite Party was directed to pay compensation of ₹40,00,000/-. Aggrieved by this decision, the present appeal has been preferred by the appellant.

The Learned Counsel for the appellants, argued firstly, that the complainant was not a consumer, and that there was no consumer-service provider relation between the appellant and the Respondent for the purpose of providing the allotment of a flat; that the complainant was a mere registrant, who had registered under the Scheme and there was no definite assurance given to the complainant for a definite allocation of flat; that the SFS scheme provided that the same could be closed or discontinued by the appellant, therefore, it is bad in law to rely on one clause of the scheme and turn a blind side on the other norms of the scheme. It was further contended that the consumer complaint was barred by limitation, since the grievance had first arisen in February, 1990, when the complainant became aware that the First and Second registrants could not apply for the allotment. The counsel relied on precedents in order to assert that the period of limitation begins from the date when the cause of action first accrues; and that mere filing of representation and too after a long period of time cannot be a ground for continuation of cause of action in perpetuity.

The Learned Counsel for the Respondents, supported the order passed by the State Commission as according to him the State Commission has passed a well-reasoned order which is based on a correct and rightful appreciation of evidence and material available on record and does not call for any interference.

The NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI, held that the contention of that the complaint was time-barred has no force and the same was rejected. Further, it held that due to cost of land and construction material, the cost of the flats has been increased, therefore, the direction of the State Commission to allot a flat at the rate on which last flat in the said category and said area was allotted by the OP, or in the alternative to pay a huge of compensation of ₹40,00,000/-, was considered erroneous.  Keeping in view the peculiar facts and circumstance of the case, it was held to be in the interest of justice, if the complainant was allotted the flat at the rate prevalent as on the date of the order passed by the State Commission or in alternative, a lumpsum compensation of ₹10,00,000/- was awarded to the respondent. Therefore the appeal was partly allowed.

Click here to read the judgement.

Judgement reviewed by Bhargavi