Case details

Court: Supreme Court of India
Decided: 25 January 2022
Bench: L. Nageswara Rao
Citations: 2022 INSC 91[2022] 8 S.C.R. 51
Type: Judgment (Disposed off)

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Citation: [2022] 8 S.C.R. 51 (search it on the Supreme Court's e-SCR portal)

Supreme Court of India

B.B. PATEL & ORS versus DLF UNIVERSAL LTD on 25 January 2022

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B.B. PATEL & ORS.

DLF UNIVERSAL LTD.

(Civil Appeal No. 1106 of 2009)

JANUARY 25, 2022

[L. NAGESWARA RAO, B. R. GAVAI AND

B. V. NAGARATHNA, JJ.]

Monopolies and Restrictive Trade Practices Act, 1969 – ss.12-B, 36-A, 36-B(a), (d), 36-D and 36-E r/w ss.2(i) and 2(o) – Held:s.12-B of the MRTP Act empowers the Commission to grantcompensation only when any loss or damage is caused to aconsumer as a result of a monopolistic, restrictive or unfair tradepractice – In the present case, there has been no misrepresentationmade by the respondent amounting to an unfair trade practice forthe delay in handing over possession of the apartments – Therewas no misrepresentation made by the respondent and, therefore,the allegation of unfair trade practice is rejected – Thus, asappellants have failed to prove unfair trade practice on the part ofthe respondent, they are not entitled to any compensation – Further,it is settled law that final relief granted by this Court need not bethe natural consequences of the ratio decidendi of its judgment –Thus, though, the order of MRTP Commission dismissing thecomplaint filed by the appellants u/ss.36-A, 36-B(a), (d), 36-D and36-E r/wss.2(i) and 2(o), MRTP Act has been upheld, in the interestof justice, the respondent is directedto handover possession of theflats to the appellants on payment of Rs.25,00,000/- for each flatby the appellants – Consumer Protection Act, 1986 – s.2(r).

Consumer Protection Act, 1986 – s.2(r) – Monopolies andRestrictive Trade Practices Act, 1969 – Held: s.2(r) of the ConsumerProtection Act defines unfair trade practice, which is exactly thesame as the definition of unfair trade practice in MRTP Act – Incase a consumer satisfies the consumer forum that the goodscomplained against, suffer from any defect or there is deficiency inservice, the opposite party can be directed to remove the defect orreplace the goods free from defect – The appropriate forum candirect removal of deficiency in service and direct the opposite partyto discontinue the unfair trade practice or restrictive trade practice.

DEF

AContract – Time when not essence of contract – Held: In thepresent case, though there is a clause in the Apartment BuyerAgreement (ABA) mentioning that the possession was to be handedover within a period of two and half to three years from the date ofABA, it cannot be said that time was made the essence of the contractas a reasonable extension of time for delivery was permissible asBper clause 16 – Thus, there was no intention on the part of theappellants to insist on time being the essence of contract as theydid not terminate the ABA due to delay in handing over possessionof the apartments which they could have in accordance with clause18 of the ABA – Allegation in the complaint is that the respondentCcommitted unfair trade practice by seeking to recover large sums ofmoney from the buyers without handing over possession of the flats– In the garb of delay in handing over possession of the property,the appellants are seeking possession of a property, the cost ofwhich is more than 10 times the price at which it was offered, withouteven paying the balance basic sale price–Monopolies and RestrictiveDTrade Practices Act, 1969.

Disposing of the appeal, the Court

Conclusion

Disposing of the appeal, the Court

HELD: 1.1 The MRTP Act, 1969 was meant to ensure thatthe operation of the economic system does not result in theEconcentration of economic power to the common detriment, forthe control of monopolies, for the prohibition of monopolistic andrestrictive trade practices and for other connected matters. TheAct was made pursuant to the recommendations made by theMonopolies Enquiry Commission which submitted its report on31.10.1965. Initially, there was no provision relating to unfairFtrade practices in the MRTP Act. By Section 30 of Act 30 of 1984,Sections 36A, 36B, 36D and 36E were inserted in the MRTPAct. Unfair trade practice as defined in Section 36A of the MRTPAct is a trade practice which, for the purpose of promoting thesale, use or supply of any good or for the provision of any servicesGadopts any unfair method or unfair or deceptive practice includingother practices mentioned therein. The manner in which theinquiry may be conducted by theCommission into unfair tradepractices is dealt with by Section 36B of the MRTP Act. Section36D of the MRTP Act provides for the powers which may beexercised by the Commission while inquiring into an unfair tradeH

practice. After conducting an inquiry, if the Commission is of theopinion that the practice is prejudicial to the public interest, orto the interest of any consumer or consumers generally, theCommission, may direct that (a) the practice shall be discontinuedor shall not be repeated (b) any agreement relating to such unfairtrade practice shall be void or shall stand modified in respectthereof in such manner as may be specified in the order and (c)any information, statement or advertisement relating to suchunfair trade practice shall be disclosed, issued or published, asthe case may be, in such manner as may be specified in the order.There was a further amendment made in the year 1991 by whichSection 36C was inserted in the MRTP Act which dealt withinvestigation by Director General before issuing anyprocess incertain cases, apart from certain changes made to Sections 36Aand 36D of the MRTP Act. The appellants have relied uponjudgments of this Court on unfair trade practice in disputes undertheConsumer Protection Act, 1986. The Consumer ProtectionActwas meant for better protection of the interest of consumersand for the purpose, to make provision for the establishment ofconsumer councils and other authorities, for settlement ofconsumer disputes and for matter connected therewith. Section2(r) was introduced in the Consumer Protection Actby anamendment with effect from 18.06.1993.Section 2(r) of theConsumer Protection Act defines unfair trade practice, which isexactly the same as the definition of unfair trade practice in MRTPAct. In case a consumer satisfies the consumer forum that thegoods complained against, suffer from any defect or there isdeficiency in service, the opposite partycan be directed to removethe defect or replace the goods free from defect. The appropriateforum can direct removal of deficiency in service and direct theopposite party to discontinue the unfair trade practice orrestrictive trade practice. The forum also has the power to awardany amount towards compensation for any loss or injuries sufferedby the consumer due to the negligence of the opposite party.[Paras 11 and 12][66-E-H; 67-A-G]

1.2 The thrust of the complaint preferred by the appellantsis that the respondent is guilty of unfair trade practice formisrepresentation as there was delay in handing over possession ABC

Aof the apartments and extra charges were imposed arbitrarily.According to the appellants, there was a fixed period of 2½ to 3(two and half to three years) during which the apartments shouldhave been handed over and there was considerable delay in thecompletion of the project. Imposition of extra cost wasimpermissible as the buyers were notinformed about such futureBcost at the time when theApartment Buyer Agreement(ABA) wasentered into amounting to a false representation resulting in anunfair trade practice.In so far as unfair trade practice withreference to the delay in handing over possession is concerned,the relevant clauses in the ABA which was entered into betweenCthe parties on 23.3.1993 are clauses 16, 18 and 21(d) of the ABA.According to clause 16, the company is entitled for reasonableextension of time for delivery of possession of the premises, incase, possession could not be delivered within 21/2 to 3 (two andhalf to three) years from the date of booking. The reasons forwhich a reasonable extension of time is available are elaboratedDin clause 16. Clause 18 permits the allottee to terminate the ABAby giving a notice if the company fails to deliver the possessionof the premises within the period specified in clause 16. Theamount of earnest money and other amounts paid by the allotteesshall then be refunded by the company. According to clause 21(d),Ethe company shall endeavour to hand over the possessionof premises to the apartment allottee as a licensee on monthlylicense basis on completion of payment of 40% of the sale priceand other charges as per clause 21(d). There is no doubt thatthere has been a delay in completion of the project beyond threeyears. However, the appellants did not issue any notice forFtermination of the agreement. On the other hand, notices issuedby the appellants on 24.02.1998, 22.04.1998 and 12.08.1998related to demand of extra costs. The appellants did not, at anypoint of time, make a grievance relating to delay in handing overof possession of the apartment. The main relief in the complaintGfiled by the appellants is to declare the termination of the ABAby the respondent as void. A further direction was sought forhanding over the apartments without any payments towards theremaining principal amount and extra charges alongwith damagesand compensation. [Paras 16 and 17][69-G-H; 70-A-G]

1.3 In the present case, though there is a clause in the ABAwhich mentioned that the possession has to be handed over withina period of 2½ to 3 (two and half to three) years from the date ofABA, it cannot be said that time was made the essence of thecontract as a reasonable extension of time for delivery waspermissible as per clause 16. There was no intention on the partof the appellants to insist on time being the essence of contractas they did not terminate the ABA due to delay in handing overpossession of the apartments which they could have in accordancewith clause 18 of the ABA. As stated earlier, no notice was issuedby them which related to their grievance with respect to the delayin handing over the possession. The allegation in the complaintis that the respondent has committed unfair trade practice byseeking to recover large sums of money from the buyers withouthanding over possession of the flats. In the garb of delayin handing over possession of the property, the appellants areseeking possession of a property, the cost of which is more than10 times the price at which it was offered, without even payingthe balance basic sale price. None of the ingredients constitutingan offence of unfair trade practice as elucidated by this Court inColgate Palmolive (India) Ltd. v. MRTP Commission &Ors. havebeen substantiated by the appellants. On a detailed considerationof the material on record, this Court is of the considered viewthat there has been no misrepresentation made by the respondentamounting to an unfair trade practice for the delay in handingover possession of the apartments.The extra charges that weredemanded by the respondent were pursuant to clauses 2(b), 4,15 and 16 of the ABA. According to the appellants, demand ofextra charges after the commencement of construction amountedto manipulation of prices which resulted in increase in the cost tothe detriment of the buyers. Extra cost demanded by therespondent was incurred due to introduction of a third lift in eachtower, space being provided for laundry facility in basement andlarger entrance lobbies in each tower. Other charges relate tofirefighting system, external electrification and normal operationand maintenance costs of recreational facilities. It is pertinent tonote that the cost towardsescalation of material and labour afterthe 30.03.1996 was not included in the demand. Even theadditional cost incurred due to revision in the schedule was born AB

Aby the respondent. There is no dispute that appellants had paidinitial instalments towards extra charges. The respondent hadalso duly informed the appellants of the details of the extra costbeing incurred. This Court is not in agreement with the contentionof the appellants that imposition of extra charges is a calculatedand pre- planned design of the respondent. There is noBmisrepresentation made by the respondent and, therefore, theallegation of unfair trade practice is rejected. [Paras 19-21][71-D-G; 72-D-H; 73-A]

Colgate Palmolive (India) Ltd. v. MRTP Commission &Ors. (2003) 1 SCC 129 : [2002] 4 Suppl. SCR 219 –Crelied on.

1.4 There is no quarrel with the proposition in CentralInland Water Transport Corporation that an unconscionable termin a contract is void under Section 23 of the Indian Contract Act,1872. The other casesrelied upon by the appellants pertain toDdisputes under the Consumer Protection Act. All the three casesrelate to either refund of the amounts deposited by the flat buyersor payment of compensation for delay on the part of the builderin handing over possession of the flats on a clear finding of factthat the delay in handing over possession was solely attributableEto the builder. After examining the terms of the Agreement inthose cases, this Court was of the opinion that entitlement of theflat buyers to compensation for deficiency in service on the partof the builder cannot be restricted by the agreements which areone sided. The said judgments are not applicable in the instantcase. The reliefs claimed in the said cases are completely differentFfrom the main reliefs in the present case. In the said cases, thegrievance of the flat buyers was that since there had been asubstantial delay in delivery of the apartments, the buyer shouldbe entitled to terminate the agreement and to recover theamounts already paid along with just and reasonable interest/Gcompensation which could not be confined to theterms as statedin a one-sided agreement. As against this, the appellants in thiscase are essentially seeking possession of the apartments bydeclaration of termination of the agreement by the respondent tobe void, without having to pay any money towards extra chargesor even the basic sale price. There has been no specific referenceH

to any clause in the ABA by which the appellants appear to beaggrieved so as to shock the conscience of this Court to travelbeyond its terms in light of it being an unconscionablecontract.There is an averment in para 16 of the complaint thatABA is an unconscionable contract opposed to public policy as aconsumer has no bargaining power and is an easy victim of unfairtrade practice. There is no reference to any clause of the ABA,in particular, to substantiate the allegation. On the other hand,the appellants repeatedly refer to the allegation of delay in handingover possession and imposition of extra charges apart from non-refund of interest on the amounts paid by them. The appellantsare not entitled to any relief on this count as the order of MRTPhas already been approved by this Court by holding that there isno unfair trade practice on the part of the respondent. Thecompensation sought by the appellants cannot be granted asSection 12-B of MRTP Act empowers the Commission to grantcompensation only when any loss or damage is caused to aconsumer as a result of a monopolistic, restrictive or unfair tradepractice. As the appellants have failed to prove unfair tradepractice on the part of the respondent, they are not entitled toany compensation. [Paras 23 and 24][74-D-H; 75-A-D]

Pioneer Urban Land & Infrastructure Limited v.Govindan Raghavan (2019) 5 SCC 725; WingCommander Arifur Rahman Khan And Aleya Sultana& Ors. v. DLF Southern Private Limited (2020) 16 SCC512; Ireo Grace Realtech Private Limited v. AbhishekKhanna & Ors (2021) 3 SCC 241 – held inapplicable.

Central Inland Water Transport Corporation Ltd. & Anr.v. Brojo Nath Ganguly and Anr. (1986) 3 SCC 156 :[1986] 2 SCR 278 – referred to.

1.5 The learned Senior Counsel for the respondentsubmitted that the price of each flat is Rs.3.25/- crores today. Inresponse to the suggestion made by this Court, he obtainedinstructions from the respondent and submitted that therespondent is willing to handover the flats provided the appellantspay the balance amount payable i.e., Rs.31,52,933/- for each flat. Itis settled law that final relief granted by this Court need not be AB

Ratio decidendi

Athe natural consequences of the ratio decidendi of itsjudgment.Though, this Court has upheld the order of MRTPCommission, in the interest of justice, the respondent shallhandover possession of the flats to the appellants on payment ofRs.25,00,000/- (Rupees Twenty-Five Lakhs Only) for each flatby the appellants. [Paras 25 and 26][75-D-E, G-H; 76-A-B]BM/s Lakhanpal National Limited v. M.R.T.P. Commission& Anr. (1989) 3 SCC 251 : [1989] 2 SCR 979; M/sPhilips Medical System (Cleveland) v. Indian MRIDiagnostic & Research Limited (2008) 10 SCC 227 :[2008] 13 SCR 1140; Rajasthan Housing Board v.CParvati Devi (2000) 6 SCC 104 : [2000] 3 SCR 934;Bangalore Development Authority v. Syndicate Bank(2007) 6 SCC 711 : [2007] 7 SCR 47; Sanjay Singh &Anr. v. U.P. Public Service Commission & Anr. (2007) 3SCC 720 : [2007] 1 SCR 235; U.P. Public ServiceDCommission v. Manoj Kumar Yadav & Anr (2018) 3SCC 706 – relied on.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1106 of2009.

GFrom the Judgment and Order dated 19.01.2009 of the MonopoliesAnd Restrictive Trade Practices Commission, New Delhi in RestrictiveTrade Practice Enquiry No.36 of 1999.

M. L. Lahoty, Anchit Sripat, Pranab Kumar Nayak, Ms. HemantikaWahi, Ms. Jesal Wahi, Advs. for the Appellants.

Pinaki Misra, Sr. Adv., Ravinder Narain, Praveen Bahadur,Siddharth Banthia, Ms. Kanika Gomber, Vishnu Kant, Ishan Narain, RajanNarain, Advs. for the Respondent.

The Judgment of the Court was delivered by

L. NAGESWARA RAO, J.

1. This appeal has been filed against the judgment dated 19.01.2009of the Monopolies and Restrictive Trade Practices Commission, NewDelhi dismissing a complaint filed by the appellants under Sections 36-A, 36-B(a) and (d), 36-D and 36-E read with Sections 2(i) and 2(o) ofthe Monopolies and Restrictive Trade Practices Act, 1969 (hereinafterreferred to as “MRTP Act”).

2. An advertisement was issued by the respondent proposingattractive schemes of payment for the sale of group housing apartments/flats namely, “Beverly Park-I” at Qutab Enclave Complex in Gurgaon.According to one of the schemes, possession of the flats/apartmentswas to be handed over on payment of 40% of the cost of the flat within2 ½ (two and half) years and the balance amount was to be paid withinequated instalments over the next seven and half years. On 14.01.1993,the appellants applied for allotment of 4 apartments Nos. 404A, 404B,406A and 406B in Tower No. 4, Windsor. By choosing the aforementionedoption, the appellants sought to make payment for the apartments withina period of 10 years. According to the application form, possession wasto be delivered to the appellants as “Licensees” for use and occupationon a monthly License Fee till the balance sale consideration was paid.Flats with super area of 270.35 sq. meter at the basic sale price ofRs.7,525/- per sq. meter were allotted to the appellants. Apart from thebasic sale price, External Development Charges (EDC) @ Rs.376/- persq. meter, construction deposit of Rs.21.5 per sq. meter and lumpsumsecurity of Rs.15,000/- were to be paid by the appellants for each flat.

3. The Apartment Buyer Agreement (hereinafter referred to as“ABA”) was executed on 23.03.1993. The relevant clauses of the ABAare as under: - “2(b). The Apartment allottee shall additionally pay on demand tothe Company his proportionate share of the cost for the provisionof external electrification (including but not limited to installationof electric sub-station, meter box, electric stand-by generator)

SUPREME COURT REPORTS

Aand all fire safety measures (including but not limited to fire fightingequipment and other accessories, materials and other itemsrequired for the installation and use of the aforesaid equipment.).In addition, if due to subsequent legislation/Govt. orders ofdirectives or guidelines or if deemed necessary by the Company,any further fire safety measure are undertaken, the proportionateBcharges in respect thereof shall also be payable on demand by theApartment allottee.

2(c). The Apartment Allottee shall pay a further sum ofRs.____________ (Rupees ___________only) as preferentiallocation charges as per schedule of payments (Annexure II)annexed hereto. However, if due to change in the layout plan andconsequent change in the allotment of the Apartment, it ceases tobe so located or there is a change in the preferential locationbefore or after the registration of sale deed, the Company shall beliable only to refund without interest extra charges recovered forsuch preferential location or shall be entitled to recover extrapreferential location charges as the case may be.

E4. The price of the Apartment stipulated hereinabove is based onthe price of all materials and labour charges pertaining theretoruling on the 1[st] day of January, 1993. If, however, during theprogress of work, there is increase in the price of the materialsused in the construction work and or labour charges on accountof any reason statutory or otherwise, the cumulative effect ofFsuch increase as assessed by the Company and intimated to theApartment Allottee shall be debited to Apartment Allottee’s accountwho shall pay the same on demand. The decision of the Companyin this respect shall be final and binding on the Apartment Allottee.The increased incidence may be charged and recovered by theGCompany from the Apartment Allotee with any one or more ofthe instalments or separately but in any case, before givingpossession or deemed possession of the Apartment.

16. That the possession of the said premises is proposed to bedelivered by the company to the Apartment allottee within twoand half/three years from the date of booking of the said premisesby the time aforementioned. If the completion of the buildings (s)is delayed by reason of non-availability of steel and or cement orother building materials or water supply or electric power or slowdown strike or due to a dispute with the construction agencyemployed by the company civil commotion or by reason of war orenemy action or earthquake of any act of god or if non-deliveryof possession is as a result of any act, notice, order, rule ornotification of the government and or any other public competentauthority or for any other reason beyond the control of the companyand in any of the aforesaid events the company shall be entitled toa reasonable extension of time for delivery of possession of thesaid premises.

The Company as a result of such a contingency arising reservesthe right to alter or vary the terms and conditions of allotment or ifthe circumstances beyond the control of the company so warrantthe company may suspend the scheme for such period as it mayconsider expedient and no compensation of any nature whatsoevercan be claimed by the apartment allottee for the period ofsuspension of the scheme.

In consequence of the company abandoning the scheme thecompany liability shall be limited to the refund of the amount paidby the allottee without any interest or any other compensationwhatsoever.

18. THAT, if for any reason, the Company is unable or fails todeliver possession of the said premises to the Apartment Allotteewithin the time specified in clause 16 above, or within any furtherperiod or periods as agreed to by and between the parties hereto,then in such case, the Apartment Allottee shall be entitled to givenotice to the Company terminating the Agreement, in which eventthe Company shall be at liberty to sell and dispose of the saidpremises to any person at such price and upon such terms andconditions as the Company may deem fit. The Company shall A

Awithin a reasonable time from the date of receipt of such noticeand sale of the premises, refund to the Apartment Allottee theaforesaid amount of earnest money and the further amount, thatmay have been received by the company for the apartment allotteeas part payment(s) in respect of the said premises neither partyshall have any other claim against the other in respect of the saidBpremises or arising out of this Agreement.

21(d). That the Company shall endeavour to handover, to theCApartment Allottee, the Possession of the premises as merely a“Licencee” on monthly licence basis on the Apartment Allotteecompleting payment of 40% of the sale price and other chargesand the Apartment Allottee agree to pay the balance 60% of thesale price in 30 quarterly instalments as indicated in schedule ofDpayments (Annexure II).

If, however for any reason whatsoever, the Company is unable tohandover possession/deemed possession of the Apartment withinthe agreed time, the Apartment Allottee shall continue to makepayment to the Company only of the agreed equated quarterlyEinstalments including interest @ 18% per annum on reducingbalance payment basis. The Licence Fee shall, however, becomepayable from the date of the possession/deemed possession ofthe Apartment.”

4. Though the possession of the flats was to be handed over toFthe appellants in January 1996, according to the appellants, constructioncommenced only in June, 1996. The appellants continued to makepayment of the instalments as per schedule of payments annexed withthe ABA. An amount of Rs.14,62,552/- was paid till 14.4.1997 for eachflat. On 21.04.2007, the respondent issued a Circular apologizing for thedelay in construction which was due to major improvements being carriedGout in specifications and facilities in order to provide a better product.The circular also referred to the delay in obtaining Government approvals.The appellants were informed about the improvements in the projectthat were being introduced which included (a) provision for extra lift, (b)large entrance hall, (c) imported marble, (iv) copper pipes for plumbing,(v) standby generator and (vi) wooden flooring in study room.H

B.B. PATEL & ORS. v. DLF UNIVERSAL LTD.[L. NAGESWARA RAO, J.]

5. The respondent sent a demand letter on 02.06.1997 by whichthe appellants were intimated about the extra charges which worked outto Rs. 8,78,905/- for each flat on account of increase in the area by9.236 sq. meters, escalation charges on material and labour, externalelectrification costs including 24 hours back-up power, sub-station DGsets, etc. and costs for firefighting measures including sprinkler systemand smoke detectors which were being provided. On 26.06.1998, therespondent informed the appellants that the completion certificate hadbeen received from the authorities and that the apartments were readyfor use and occupation. The appellants were requested to make thepayments of outstanding dues and complete the documentation work.According to the Statement of Account sent by the respondent, an amountof Rs.19,88,242/- was already paid and the balance due as on 31.07.1998was Rs.7,46,919/-. In response to the demand for payment of outstandingamount made by the respondent, the appellants sent a letter dated12.08.1998. In this letter, the appellants informed the respondent thatthey had paid money in excess of what was due and sought refund ofthe excess amount paid. Another reminder was sent by respondent askingthe appellants to remit an amount of Rs.8,84,287/- which was overdue.Thereafter on 19.01.1999, the respondent cancelled the ABA as theoutstanding amount was not paid. The respondent also issued chequesrefunding the amounts paid for the flat by the appellants which were notencashed by the appellants.

6. The appellants filed a complaint bearing RTPE No. 36 of 1999under Sections 10(a)(i) IV, 36A, 36B(a) and (d), 36D and 36E read withSections 2(i) and 2(o) of the MRTP Act along with Regulations framedthereunder. In the complaint, the appellants sought for an inquiry into thecommission of various restrictive/unfair/monopolistic trade practices bythe respondent and for an appropriate cease and desist order against therespondent restraining the respondent from indulging in similar restrictive/unfair/monopolistic trade practices. Further, the cancellation of theallotment of apartment Nos. 404A, 404B, 406A and 406B “Beverly Park-I” at Qutab Enclave Complex was challenged. The appellants also soughtfor setting aside the extra charges levied by respondent by letter dated02.6.1997. A direction was sought to the respondent to pay interest @24% per annum on the instalments paid by the appellants from the dateof payment to the date of handing over of the possession of theapartments. The appellants also sought for a direction to the respondentto handover possession of the apartments forthwith after appropriating A

Athe amounts already paid towards basic sale price and a direction to payliquidated damages for loss of rental income from 15.07.1996 along withRs.10,00,000/- as compensation.

7. A preliminary objection was raised by the respondent about thejurisdiction of MRTP to entertain the complaint. Relying upon judgmentsBof this Court, the respondent contended that the complaint flows froman agreement, breach whereof can only be subject matter of civil suit,and therefore, a complaint of unfair trade practice cannot be entertainedby the Commission. The Preliminary objection was rejected by theCommission on the ground that Sections 36-A and 37(1) of the MRTPAct related to unfair/restrictive trade practices and the Commission hasCjurisdiction to examine the validity of the agreement.

8. The contention of the appellants relating to monopolistic practicewas rejected by the Commission. In respect of a complaint of unfairtrade practice due to the delay in handing over possession of theapartments, the Commission examined the relevant clauses of the ABADand the contentions of the appellants. In particular, clauses 16, 18 and21(d) were referred to by the Commission to hold that no fixed period of2 ½ to 3 (two and half to three) years was agreed upon between theparties for handing over possession of the apartments. The Commissionwas of the view that it is clear from the ABA that the construction andEdevelopment would be in accordance with the building plan as may beapproved by the Director, Town and Country Planning, Government ofHaryana and that possession of the premises was only proposed to bedelivered within 2 ½ to 3 (two and half to three) years. Clause 16 of theABA was referred to by the Commission to observe that the respondentwould be entitled for a reasonable extension of time for delivery ofFpossession, in case there was any delay. Further, the Commission wasof the view that the allottee was entitled to issue notice to the companyterminating the ABA under clause 18 thereof, in case, respondent fail todeliver possession within the time mentioned in clause 16. TheCommission concluded that since there was no misrepresentation madeGby respondent and there was no material produced by the appellants toshow that they entered into the agreement under duress or fraudulentrepresentation, delay in handing over possession of the apartments tothe appellants did not amount to an unfair trade practice. In so far as theextra cost demanded by the respondent resulting in unfair trade practiceis concerned, the Commission was of the opinion that demand andH

collection of extra cost was in terms of the ABA which was agreed toby the appellants and some instalments towards extra cost have beenpaid by them. As the details for the demand of extra charges were givenby the respondent, it cannot be said that there was any concealment ontheir part. The Commission further took note of the fact that the cost ofescalation beyond the contract period was absorbed by the respondent.Ultimately, the Commission concluded that the appellants failed tosubstantiate the allegation of unfair trade practice on the ground ofimposing extra charges.

9. We have heard Mr. M.L. Lahoti, learned Counsel appearingfor the appellants and Mr. Pinaki Mishra, learned Senior Counselappearing for the respondent. The learned counsel appearing for theappellants submitted that the appellants entered into an ABA on 23.03.1993for purchase of apartments after being misled by the advertisementsissued by the respondent. According to the advertisement and brochures,possession of the apartments had to be delivered within 2 ½ to 3 (twoand half to three) years from the date of signing of ABA and on promptpayment of the instalments till that date. The remaining amount could bepaid by the buyers within next 7[1/2 ](seven and half) years. The constructionof the apartments could not commence even after the expiry of a periodof three years, as the building plans were approved only on 14.08.1996.It was submitted that since a clear case of misrepresentation has beenmade out, the respondent is guilty of unfair trade practice in not handingover the possession of the apartment within the fixed period of 2 ½ to 3(two and half to three) years. The appellants submitted that a perusal ofthe ABA would show that it is a one-sided contract completely in favourof the respondent. The buyers were made to sign on dotted lines and theconditions in the clauses of the contract would demonstrate that theABA is lopsided tilting in favour of the builder. Such agreements havebeen declared to be unconscionable and void by this Court. Appellantsfurther submitted that the demand of extra charges by the respondentwas impermissible. As the respondent imposed extra charges which arenot contemplated in the ABA, it is clear that the respondent has committedan unfair trade practice. The appellants were not informed at the time ofentering into the ABA that extra charges would be levied. Moreover, thedetails of the extra charges were given only after persistent demands ofthe appellants.

A10. Per contra, the defense of the respondent is that appellantswere not coerced to enter into the ABA. It was only after understandingthe implications of different clauses in the ABA, that the appellants booked4 apartments in the project, which is a landmark property in Gurgaontoday. There was no fixed time for handing over of the possession andthe delay was due to late approval of plans from the concerned authoritiesBapart from other unforeseen reasons. It was submitted that it was opento the appellants to terminate the contract if they were aggrieved by thedelay in handing over possession of the apartments. The appellants initiallyaccepted the demand of certain amounts towards extra charges andpaid some instalments towards the same. Thereafter, the appellantsCprotested payment of extra cost. The demand of extra cost waspermissible according to the terms of the ABA. As there was nomisrepresentation on the part of the respondent, unfair trade practice ascomplained by the appellants has not been made out. The respondentsubmitted that majority of buyers of Beverly Park flats have taken overpossession of their apartments long back without any complaint. A fewDothers who raised some disputes have settled with the respondent. It isonly the appellants who have been continuing to litigate for nearly 30years since the date of signing of the ABA in 1993. Several attemptswere made for settling the dispute, which yielded no result.

11. The MRTP Act, 1969 was meant to ensure that the operationEof the economic system does not result in the concentration of economicpower to the common detriment, for the control of monopolies, for theprohibition of monopolistic and restrictive trade practices and for otherconnected matters. The Act was made pursuant to the recommendationsmade by the Monopolies Enquiry Commission which submitted its reportFon 31.10.1965. Initially, there was no provision relating to unfair tradepractices in the MRTP Act. By Section 30 of Act 30 of 1984, Sections36A, 36B, 36D and 36E were inserted in the MRTP Act. Unfair tradepractice as defined in Section 36A of the MRTP Act is a trade practicewhich, for the purpose of promoting the sale, use or supply of any good or for the provision of any services adopts any unfair method or unfairGor deceptive practice including other practices mentioned therein. Themanner in which the inquiry may be conducted by the Commission intounfair trade practices is dealt with by Section 36B of the MRTP Act.Section 36D of the MRTP Act provides for the powers which may beexercised by the Commission while inquiring into an unfair trade practice.HAfter conducting an inquiry, if the Commission is of the opinion that the practice is prejudicial to the public interest, or to the interest of anyconsumer or consumers generally, the Commission, may direct that (a)the practice shall be discontinued or shall not be repeated (b) anyagreement relating to such unfair trade practice shall be void or shallstand modified in respect thereof in such manner as may be specified inthe order and (c) any information, statement or advertisement relating tosuch unfair trade practice shall be disclosed, issued or published, as thecase may be, in such manner as may be specified in the order. Therewas a further amendment made in the year 1991 by which Section 36Cwas inserted in the MRTP Act which dealt with investigation by DirectorGeneral before issuing any process in certain cases, apart from certainchanges made to Sections 36A and 36D of the MRTP Act.

12. As against this, it is also necessary to deal with relevantprovisions of the Consumer Protection Act, 1986 (hereinafter referredto as the “Consumer Protection Act”) as the appellants have relied uponjudgments of this Court on unfair trade practice in disputes under theConsumer Protection Act. The Consumer Protection Act was meantfor better protection of the interest of consumers and for the purpose, tomake provision for the establishment of consumer councils and otherauthorities, for settlement of consumer disputes and for matter connectedtherewith. Section 2(r) was introduced in the Consumer Protection Actby an amendment with effect from 18.06.1993. Section 2(r) of theConsumer Protection Act defines unfair trade practice, which is exactlythe same as the definition of unfair trade practice in MRTP Act. In casea consumer satisfies the consumer forum that the goods complainedagainst, suffer from any defect or there is deficiency in service, theopposite party can be directed to remove the defect or replace the goodsfree from defect. The appropriate forum can direct removal of deficiencyin service and direct the opposite party to discontinue the unfair tradepractice or restrictive trade practice. The forum also has the power toaward any amount towards compensation for any loss or injuries sufferedby the consumer due to the negligence of the opposite party.

13. It would be relevant to refer to the law laid down by this Courtin respect of unfair trade practices under the MRTP Act. In M/sLakhanpal National Limited v. M.R.T.P. Commission & Anr.[1],this Court has held as follows: - 1 (1989) 3 SCC 251

“7. However, the question in controversy has to be answeredby construing the relevant provisions of the Act. The definition of“unfair trade practice” in Section 36-A mentioned above is notinclusive or flexible, but specific and limited in its contents. Theobject is to bring honesty and truth in the relationship between themanufacturer and the consumer. When a problem arises as towhether a particular act can be condemned as an unfair tradepractice or not, the key to the solution would be to examine whetherit contains a false statement and is misleading and further what isthe effect of such a representation made by the manufacturer onthe common man? Does it lead a reasonable person in the positionof a buyer to a wrong conclusion? The issue cannot be resolvedby merely examining whether the representation is correct orincorrect in the literal sense. A representation containing astatement apparently correct in the technical sense may have theeffect of misleading the buyer by using tricky language. Similarly,a statement, which may be inaccurate in the technical literal sensecan convey the truth and sometimes more effectively than a literallycorrect statement. It is, therefore, necessary to examine whetherthe representation, complained of, contains the element ofmisleading the buyer. Does a reasonable man on reading theadvertisement form a belief different from what the truth is? Theposition will have to be viewed with objectivity, in an impersonalmanner. It is stated in Halsbury’s Laws of England (Fourth Edition,paragraphs 1044 and 1045) that a representation will be deemedto be false if it is false in substance and in fact; and the test bywhich the representation is to be judged is to see whether thediscrepancy between the fact as represented and the actual factis such as would be considered material by a reasonablerepresentee. “Another way of stating the rule is to say thatsubstantial falsity is, on the one hand, necessary, and, on the other,adequate, to establish a misrepresentation” and “that ‘where theentire representation is a faithful picture or transcript of theessential facts, no falsity is established, even though there mayhave been any number of inaccuracies in unimportant details.Conversely, if the general impression conveyed is false, the mostpunctilious and scrupulous accuracy in immaterial minutiae willnot render the representation true.”

14. Referring to the amendment made to the MRTP Act in 1984,this Court in M/s Philips Medical System (Cleveland) v. IndianMRI Diagnostic & Research Limited[2], held that the object of theamendment broadly was to prevent false or misleading advertisements,or false representations, claiming that the goods sold are of a certainstandard or have certain qualities, which, in fact, they do not possess.Amendment made in 1984 was to ensure that the persons buying certaingoods were not duped or misled by a representation or advertisementwhich stated that these goods have certain features or qualities which,in fact, they do not possess.

15. In Rajasthan Housing Board v. Parvati Devi[3], delay indelivering of possession of a building amounting to unfair trade practicewas dealt with in the following terms: -

“14. For deciding such question, the Commission has to find outwhether a particular act can be condemned as an unfair tradepractice; whether representation contained a false statement andwas misleading and what was the effect of such a representationmade to the common man. The issue cannot be resolved by merelyholding that representation was made to hand over the possessionwithin stipulated period and the same is not complied with or somelesser constructed area is given after the construction of thebuilding. The Commission has to find out whether therepresentation, complained of, contains the element of misleadingthe buyer and whether buyers are misled or they are informed inadvance that there is likelihood of delay in delivering the possessionof constructed building and also increase in the cost. For thispurpose, terms and conditions of the agreement are required tobe examined by the Commission. Not only this, the Commission isrequired to consider whether the Board has adopted unfair methodor deceptive practice for the purpose of promoting the sale, useor supply of any goods or for the provisions of any services. Unlessthere is finding on this issue, appellant Board cannot be penalizedfor unfair trade practice.”

16. The thrust of the complaint preferred by the appellants is thatthe respondent is guilty of unfair trade practice for misrepresentation as 2 (2008) 10 SCC 227

3 (2000) 6 SCC104

Athere was delay in handing over possession of the apartments and extracharges were imposed arbitrarily. According to the appellants, there wasa fixed period of 2½ to 3 (two and half to three years) during which theapartments should have been handed over and there was considerabledelay in the completion of the project. Imposition of extra cost wasimpermissible as the buyers were not informed about such future cost atBthe time when the ABA was entered into amounting to a falserepresentation resulting in an unfair trade practice.

17. In so far as unfair trade practice with reference to the delayin handing over possession is concerned, the relevant clauses in the ABAwhich was entered into between the parties on 23.3.1993 are clausesC16, 18 and 21(d) of the aABA. According to clause 16, the company isentitled for reasonable extension of time for delivery of possession ofthe premises, in case, possession could not be delivered within 2[1/2] to 3(two and half to three) years from the date of booking. The reasons forwhich a reasonable extension of time is available are elaborated in clauseD16. Clause 18 permits the allottee to terminate the ABA by giving anotice if the company fails to deliver the possession of the premiseswithin the period specified in clause 16. The amount of earnest moneyand other amounts paid by the allottees shall then be refunded by thecompany. According to clause 21(d), the company shall endeavour tohand over the possession of premises to the apartment allottee as aElicensee on monthly license basis on completion of payment of 40% ofthe sale price and other charges as per clause 21(d). There is no doubtthat there has been a delay in completion of the project beyond threeyears. However, the appellants did not issue any notice for terminationof the agreement. On the other hand, notices issued by the appellants onF24.02.1998, 22.04.1998 and 12.08.1998 related to demand of extra costs.The appellants did not, at any point of time, make a grievance relating todelay in handing over of possession of the apartment. The main relief inthe complaint filed by the appellants is to declare the termination of theABA by the respondent as void. A further direction was sought for

handing over the apartments without any payments towards the remainingGprincipal amount and extra charges alongwith damages andcompensation.18. In Bangalore Development Authority v. Syndicate Bank[4],this Court examined the question whether the time is of essence in a H4 (2007) 6 SCC 711

construction contract which was the subject matter of dispute therein.Bangalore Development Authority pleaded that the time was not theessence of the contract. This Court concluded that in a contract involvingconstruction, time is not the essence of the contract unless specified.This Court referred to letters written by the respondent in which he didnot make time of performance as the essence of the contract and didnot fix even any reasonable time for performance. This Court also tooknotice of the fact that the respondent therein did not choose to terminatethe contract in view of the manifold increase in the value of the houses.Much later, the respondent demanded delivery of the property. In thefacts of the said case, this Court held that it could not be said that therespondent made time the essence of contract in a manner as recognizedby law. The Court also noted that the value of the house had escalatedto more than 10 times from the date of the Agreement and the respondenttherein had the benefit of such rise in price and value. Finally, this Courtheld that there was no deficiency in service by the appellant entitling therespondent for any compensation.

19. In the present case, though there is a clause in the ABA whichmentioned that the possession has to be handed over within a period of2[1/2] to 3 (two and half to three) years from the date of ABA, it cannot besaid that time was made the essence of the contract as a reasonableextension of time for delivery was permissible as per clause 16. Therewas no intention on the part of the appellants to insist on time being theessence of contract as they did not terminate the ABA due to delay inhanding over possession of the apartments which they could have inaccordance with clause 18 of the ABA. As stated earlier, no notice wasissued by them which related to their grievance with respect to the delayin handing over the possession. The allegation in the complaint is that therespondent has committed unfair trade practice by seeking to recoverlarge sums of money from the buyers without handing over possessionof the flats. In the garb of delay in handing over possession of the property,the appellants are seeking possession of a property, the cost of which ismore than 10 times the price at which it was offered, without evenpaying the balance basic sale price.

20. This Court in Colgate Palmolive (India) Ltd. v. MRTPCommission & Ors.[5], elucidated the following five ingredients toconstitute an offence of unfair trade practice: - AB

A“1. There must be a trade practice (within the meaning ofsection 2(u) of the Monopolies and Restrictive Trade PracticesAct);

2. The trade practice must be employed for the purpose ofpromoting the sale, use or supply of any goods or the provisionBof any services;

3. The trade practice should fall within the ambit of one ormore of the categories enumerated in clauses (1) to (5) ofSection 36A;

4. The trade practice should cause loss or injury to theCconsumers of goods or services;

5. The trade practice under clause (1) should involve makinga “statement” orally or in writing or by visible representation.”

None of the above ingredients constituting an offence of unfairDtrade practice have been substantiated by the appellants. On a detailedconsideration of the material on record, we are of the considered viewthat there has been no misrepresentation made by the respondentamounting to an unfair trade practice for the delay in handing overpossession of the apartments.

E21. The extra charges that were demanded by the respondentwere pursuant to clauses 2(b), 4, 15 and 16 of the ABA. According tothe appellants, demand of extra charges after the commencement ofconstruction amounted to manipulation of prices which resulted inincrease in the cost to the detriment of the buyers. Extra cost demandedby the respondent was incurred due to introduction of a third lift in eachFtower, space being provided for laundry facility in basement and largerentrance lobbies in each tower. Other charges relate to firefighting system,external electrification and normal operation and maintenance costs ofrecreational facilities. It is pertinent to note that the cost towards escalationof material and labour after the 30.03.1996 was not included in the demand.GEven the additional cost incurred due to revision in the schedule was bornby the respondent. There is no dispute that appellants had paid initialinstalments towards extra charges. The respondent had also duly informedthe appellants of the details of the extra cost being incurred. We are not inagreement with the contention of the appellants that imposition of extracharges is a calculated and pre-planned design of the respondent. We areH

convinced that there is no misrepresentation made by the respondent and,therefore, we reject the allegation of unfair trade practice.

22. Relying upon the judgments of this Court in Central InlandWater Transport Corporation Ltd. & Anr. v. Brojo Nath Gangulyand Anr.[6], Pioneer Urban Land & Infrastructure Limited v.Govindan Raghavan[7], Wing Commander Arifur Rahman Khan AndAleya Sultana & Ors. v. DLF Southern Homes Private Limited[8]and Ireo Grace Realtech Private Limited v. Abhishek Khanna &Ors[9], the appellants have contended that the terms of the ABA areunconscionable. In Central Inland Water Transport CorporationLtd. case (supra), clause 9(1) of Central Inland Water TransportCorporation Ltd. Service Discipline and Appeal Rules, 1979, providingfor termination of a permanent employee subject to three months’ noticewas challenged as being violative of Article 14 of the Constitution ofIndia. Upholding the judgment of the Calcutta High Court declaring thesaid rule as void, this Court observed that Rule 9(1) was opposed topublic policy and was void under Section 23 of the Indian Contract Act,1872. Delay in handing over possession of the flat to the purchaser wasthe subject matter in Pioneer Urban Land & Infrastructure Limited(supra). The purchaser in that case filed a consumer compliant seekingrefund of the amount paid by him in view of the delay in handing overpossession of the flat along with interest, which was allowed by theNational Commission. The builder approached this Court challengingthe order passed by the National Commission. The order of this Courtupheld the order of National Commission while observing that the contractbetween the parties therein was one sided. As the builder could not fulfilits contractual obligation in offering the possession of the flat within areasonable period, this Court directed refund of the entire amountdeposited by the purchaser. Similarly, the issue that fell for considerationin Wing Commander Arifur Rahman Khan and Aleya Sultana (supra)was whether the flat buyers were constrained by the stipulation in clause14 of apartment buyer agreement which provided for compensation fordelay in completion of the project @ Rs.5/- per sq. feet per month. Afterexamining the agreement, this Court held that the agreement was one 6 (1986) 3 SCC 156

Asided as it provided for payment of interest rate @ 15% per annum bythe allottee in case there is delay of payment in accordance with scheduleas opposed to the stipulation of compensation @Rs. 5/- per sq. ft permonth in case of delay on the part of the builder in completion of theproject. In view of the said conditions, this Court was of the opinion thatthe agreement is one sided and therefore, the consumer fora haveBjurisdiction to award compensation more than what was agreed upon bythe parties in the agreement. In Ireo Grace Realtech Private Ltd.case (supra), the order of the National Commission directing refund ofamount deposited by purchasers along with appropriate compensationwas approved by this Court. The concerned apartment buyer’s agreementCwas examined therein and it was held that the consumer fora have thejurisdiction to award just and reasonable compensation as an incident oftheir power to direct removal of deficiency in service.

23. There is no quarrel with the proposition in Central InlandWater Transport Corporation (supra) that an unconscionable term inDa contract is void under Section 23 of the Indian Contract Act, 1872.The other cases relied upon by the appellants pertain to disputes underthe Consumer Protection Act. All the three cases relate to either refundof the amounts deposited by the flat buyers or payment of compensationfor delay on the part of the builder in handing over possession of the flatson a clear finding of fact that the delay in handing over possession wasEsolely attributable to the builder. After examining the terms of theAgreement in those cases, this Court was of the opinion that entitlementof the flat buyers to compensation for deficiency in service on the partof the builder cannot be restricted by the agreements which are onesided. The said judgments are not applicable in the instant case. TheFreliefs claimed in the above cases are completely different from themain reliefs in the present case. In the cases cited above, the grievanceof the flat buyers was that since there had been a substantial delay indelivery of the apartments, the buyer should be entitled to terminate theagreement and to recover the amounts already paid along with just and reasonable interest/compensation which could not be confined to theGterms as stated in a one-sided agreement. As against this, the appellantsin this case are essentially seeking possession of the apartments bydeclaration of termination of the agreement by the respondent to bevoid, without having to pay any money towards extra charges or eventhe basic sale price. There has been no specific reference to any clauseHin the ABA by which the appellants appear to be aggrieved so as to shock the conscience of this Court to travel beyond its terms in light of itbeing an unconscionable contract.

24. There is an averment in para 16 of the complaint that ABA isan unconscionable contract opposed to public policy as a consumer hasno bargaining power and is an easy victim of unfair trade practice. Thereis no reference to any clause of the ABA, in particular, to substantiatethe allegation. On the other hand, the appellants repeatedly refer to theallegation of delay in handing over possession and imposition of extracharges apart from non-refund of interest on the amounts paid by them.The appellants are not entitled to any relief on this count as we havealready approved the order of MRTP by holding that there is no unfairtrade practice on the part of the respondent. The compensation soughtby the appellants cannot be granted as Section 12-B of MRTP Actempowers the Commission to grant compensation only when any loss ordamage is caused to a consumer as a result of a monopolistic, restrictiveor unfair trade practice[10]. As the appellants have failed to prove unfairtrade practice on the part of the respondent, they are not entitled to anycompensation.

25. The learned Senior Counsel for the respondent submitted thatthe price of each flat is Rs.3.25/- crores today. In response to thesuggestion made by this Court, he obtained instructions from therespondent and submitted that the respondent is willing to handover theflats provided the appellants pay the balance amount payable i.e.,Rs.31,52,933/- for each flat. The breakup of Rs.31,52,933/- is given asfollows: -

26. It is settled law that final relief granted by this Court need notbe the natural consequences of the ratio decidendi of its judgment.

10 Girish Chandra Gupta v. U.P. Industrial Development Corn. Ltd. & Ors., (2012) 13SCC 452

A(See: Sanjay Singh & Anr. v. U.P. Public Service Commission &Anr.[11] and U.P. Public Service Commission v. Manoj Kumar Yadav& Anr.[12]). Though, we have upheld the order of MRTP Commission, inthe interest of justice, the respondent shall handover possession of theflats to the appellants on payment of Rs.25,00,000/- (Rupees Twenty-Five Lakhs Only) for each flat by the appellants.B

27. For the foregoing reasons, the appeal is disposed of with adirection to the appellants to pay Rs.25,00,000/- (Rupees Twenty-FiveLakhs Only) for each flat within a period of four weeks from today andthe respondent shall handover possession of the flats to the appellantsCwithin a week from the date of payment.

Divya Pandey

Appeal disposed of.

12 (2018) 3 SCC 706