Ramesh Kumar And Chandigarh Housing Board

Case No. 39 of 2021 1 COMPETITION COMMISSION OF INDIA Case No. 39 of 2021 In Re: Ramesh Kumar House no. 454/7, New Colony, Adarsh Gali No.3, Kurukshetra-136118, Haryana Informant And Chandigarh Housing Board 8, Jan Marg 9-D, Sector 9, Chandigarh -160022. Opposite Party CORAM: Ms. Ravneet Kaur Chairperson Ms. Sangeeta Verma Member Mr. Bhagwant Singh Bishnoi Member Present: For the Informant Mr. Ramesh Kumar, Informant in Person For the Opposite Party Mr. Manpreet Singh Doabia, Advocate Order under Section 27 of the Competition Act, 2002 1. The present information has been filed by Mr. Ramesh Kumar (“Informant”) under section 19(1)(a) of the Competition Act, 2002 (“Act”) alleging contravention of the Case No. 39 of 2021 2 provisions of section 4 of the Act by Chandigarh Housing Board (“Opposite Party”/ “CHB”). Facts, in brief as per information 2. CHB floated a Self-Financing Housing Scheme (“Scheme”) on 13.12.2010 offering 160 flats on free hold basis in Sector 51-A, Chandigarh. It has been stated that at the launch of that scheme, it was highly publicised that it would be completed within 18 months with the commencement date being 25.10.2011 i.e. the construction was scheduled to be completed by 25.04.2013. Further, a Press Note dated 25.10.2011, issued by the Chandigarh Administration stated that “it will take two years to complete the housing scheme including all other infrastructure development works”. 3. It has also been averred that the construction of flats in Sector 51-A, Chandigarh commenced in October, 2011, but the contractor failed to complete the construction within 18 months. CHB was required to initiate the process of allotment of flats after the completion of construction by the contractor. CHB issued an Acceptance-cum-Demand Letter (ACDL) on 25.04.2012, advising the schedule of payment of instalments, along with interest @12% p.a. The last instalment as per the schedule, was to be paid within 18 months of issuance of the ACDL, i.e., by 25.10.2013, corresponding to the date of completion of the scheme, along with all infrastructure development works. 4. Further, the Informant stated that he had participated in the said scheme and applied for allotment of a two bedroom flat vide application No. 3656 of 2010 and paid Rs. 5,00,000/- on 12.01.2011 for the same and had to make payment further in instalments, first to be paid on 25.05.2012, and thereafter in three instalments to be paid on 25.10.2012, 25.04.2013 and 25.10.2013 each being of Rs. 13,29,681/- (during the construction period). 5. The Informant has submitted that he had deposited an amount of over Rs. 38 lakhs till April, 2013, but could not pay the last instalment due on 25.10.2013 in time. However, there was also a corresponding delay in completion of construction for one year by CHB and that during October, 2014 while the construction was nearing completion, CHB decided to initiate the process of allotment and cancelled the registration of the Informant Case No. 39 of 2021 3 on 24.10.2014 after issuing a short notice on 17.10.2014 (owing to non-payment of last instalment due on 25.10.2013). The Informant submitted that his allotment was cancelled by CHB without considering his requests dated 23.10.2014 as well 25.10.2014 and that CHB held a draw of allotment on 28.10.2014 by excluding the Informant’s registration. 6. Owing to the cancellation of his registration, the Informant submitted an appeal on 03.11.2014, to the Chairman, CHB requesting condonation of delay in deposit of third instalment and revival of allotment of the flat and thereafter deposited the amount of last instalment on 18.11.2014. CHB intimated to the Informant on 27.01.2015, to deposit an additional amount of Rs.5,36,900/- towards interest, etc. The said amount was deposited by the Informant on 06.02.2015 and the revival order was issued by CHB on 22.04.2015. 7. The Informant further stated that CHB charged an interest at the rate of 30% p.a. from 25.10.2013 till 18.11.2014 (till the payment of last instalment) although there was concurrent delay on part of CHB in initiating the process of allotment and that CHB also charged renewal fees for revival of registration. 8. The Informant also averred that for a notional delay of one day in payment of instalment, CHB had charged interest @18% on Rs.13,29,681/- (commensurate to the period of entire month). As per the Informant his two instalments due on 24.10.2012 and 24.04.2013 were paid before the due dates i.e. on 22.10.2012 and 22.04.2013, respectively, however, they got credited in the account of the CHB on 25.10.2012 and 25.04.2013, for which also CHB charged an interest (commensurate to a month) for the delay of one day and that the Informant had to pay an amount of Rs.5,36,900/- towards interest and renewal charges on 06.02.2015. Thus, the Informant made a total payment of Rs.57,10,693/- to CHB. 9. Thereafter, vide its letter dated 28.08.2015, CHB issued offer of allotment of flat with request for submission of some documents. On 06.10.2015 CHB issued possession slip and handed over the physical possession of flat on 19.10.2015. The Informant was allotted a third floor 2-bedroom flat bearing No.72C. 10. The Informant averred that CHB even after levying renewal charges from the Informant, further delayed the process of allotment of flats for another 11 months (in addition to delay Case No. 39 of 2021 4 of one year in construction), whereas the entire amount of consideration of Rs.51 lakh stood paid by the Informant by 18.11.2014. 11. The Informant submitted that CHB, in its brochure issued for the Scheme, did not make any specific mention of date or time schedule for completion of construction or for handing over the possession of the flat. Further, even in ACDL dated 25.04.2012, there was no mention of any specific date for completion/handing over of the possession of the flat. 12. The Informant averred that as per the brochure of the Scheme, there were provisions for imposing penalty by way of heavy interest in case of delay in payment of instalments by the allottees wherein the allottee/applicant was liable to pay interest @18% p.a. for the first month, @21% p.a. for the second month and @24% p.a. for the third month. However, there was no provision to pay corresponding interest to allottees for delay on part of CHB in allotment of flats either in the brochure or in ACDL. 13. The Informant also alleged that CHB charged interest @12% p.a., even during the construction period i.e. during the period of payment of usual instalments. The instalment of Rs.13,29,681/- was inclusive of interest @12% p.a. which was unusually high. 14. The Informant alleged the following clauses in the brochure/scheme to be exploitative: “CLAUSE XI SURRENDER/CANCELLATION Xl (3) In case payment of registration money or the subsequent instalment are not made by the due date of the payment prescribed in the Acceptance-cum-Demand Letter, the applicant shall have to pay interest @ 18% per annum for the 1st month, @ 21% for the 2nd month and @ 24% p.a. for the 3rd month. No extension will be allowed beyond three months and the registration shall be cancelled. However, the Chairman, CHB may allow an extension beyond three months, or revive registration, if the same has been cancelled, as the case may be, in case(s) of exceptional circumstances, on written request subject to the payment of interest @ 30% p.a. beyond the period of 3 months.