JMD GARDENS RESIDENTS WELFARE ASSOCIATION Vs. JMD LIMITED

JUDGEMENT

(1.) Complainant No.1 is the registered Residential Welfare Association of residential complex, "JMD Gardens" located at Sector 33, near Subhash Chowk,Sohna Road, Gurgaon. Complainant No.1 filed this Complaint on behalf of its 47 members who are owners of residential Flats in "JMD Garden". Opposite Party No.1 is a real estate developer having Registered Office at 6, Devika Tower, Upper Ground Floor Nehru Place, New Delhi-110019 and Corporate Office at JMD Regent Square, 3rd Floor, Mehrauli Gurgaon Road, Gurgaon-122002. Opposite Party No.1 (hereinafter referred to as 'the Developer') who developed and sold the flats to the members of Complainant No. 1(hereinafter referred to as 'the Residents'). Opposite Party No.2 is the sister concern of Opposite Party No.1 and is engaged in the maintenance of JMD Gardens, having Registered Office at 6, Devika Tower, Upper Ground Floor Nehru Place, New Delhi- 110019 and Corporate Office at JMD I Regent Square, 3rd Floor, Mehrauli Gurgaon Road, Gurgaon-122002. Opposite Party No.3 is the Director, Town and Country Planning, Haryana, Chandigarh, office at Ayozna Bhawan, Madhya Marg, Sector, Chandigarh-160018. Building plans were sanctioned by the Opposite Party No.3, vide approval letter dtd. 22/7/2005. Under Clause 2.3 of the Flat Buyer Agreement the construction of flats was to be completed within three and half years from the date of sanction of the building plans. The Residents were handed over possession of their respective flats on various dates between July 2010 and August 2012, with a delay of more than three years. The Complainants deposited a sum ranging from Rs.50.00 per square ft to Rs.70.00 per square ft in the form of a Contingency Fund. Further, the amount was stipulated as an interest free amount which the Complainant submits was per se illegal and there was no basis for charging such an interest free amount, against a demand which may or may not occur. Residents enquired with the concerned authorities and received confirmation from DTCP, Haryana that the final determination of the External Development Charges was already quantified in December 2004, which Opposite Party No.1 failed to inform them and also failed to return the excess money collected from the Residents. Further, Opposite Party No.1 in violation of clause 3.1 of the flat buyer's Agreement, included balcony in the calculation of super area. At the time of executing the sale deed, Opposite Party No.1 coerced the Residents to accept the amended definition of super area which included balcony. In addition to fraudulently misrepresenting the Super Area, Opposite Party No.1 started constructing new towers on the plot next to JMD Gardens. These towers were not in the project plan when the Residents booked respective flats in JMD Gardens. Opposite Party No.1 had, thus, encroached the original common area, in violation of the sanctioned building plan approved by DTCP, Chandigarh, Haryana. Every flat owner had an undivided interest in the common area and facilities and this arbitrary alteration of common area was in contravention to Sec. 6 (2) of The Haryana Apartment Ownership Act, 1983, which provided that the percentage of the undivided interest of each apartment owner in the common areas and facilities as expressed in the Form of Declaration shall have a permanent character and shall not be altered without the consent of all of the apartment owners. Opposite Party No.1 had collected preferential location charges from the Residents of L and M block Towers of JMD Gardens, who purchased units in lower floors on the basis of the assurance given by Opposite Party No.1 that the front area will be an open area. However, after collecting preferential location charges Opposite Party No.1 started constructing new towers which had blocked air and sun light and caused inconvenience. At the time of taking possession of their respective flats, it was alleged that the quality of construction and services provided were of inferior quality to what had been promised by Opposite Party No.1. Most of the towers suffered from serious structural defects. Almost all the flats of every tower have seepage, since inception. The moisture and seepage caused deterioration of floor joints, beams, subflooring, insulation, and electrical-mechanical systems. The Residents had strong apprehensions that prolonged water logging will soften the soil and weaken its weight bearing capacity. Serious seepage under the foundation footer may erode soil and will cause the wall to drop or crack. The map plan shown by the Developer prior to construction, represented that servant room would be accessible from the kitchen balcony. However, no such access had been provided, which rendered the servant room unusable. The alterations were made without the consent of the Residents, causing extreme inconvenience to them. Even after multiple requests the Developer had not taken necessary steps to connect the servant rooms with the kitchen. The Developer charged a significant amount for various facilities and amenities like Amphitheater, School, Shopping Complex etc., as per the conditions of approval for the building plan granted by DTCP, Chandigarh, Haryana. These facilities, however, were not provided to the Residents. Opposite Party No.1 had taken a sum of Rs.50,000.00 as Club Membership Fee from every Resident at the time of handing over possession. The said amount had not been transferred to the Complainant -Association, which was running the club. The interest free amount collected from all Residents is lying with Opposite Party No.1. Each flat owner had been assured full power backup of 6.25 KVA. Opposite Party No.1 had taken a sanctioned load which was significantly lower than the required and promised load. Further, Opposite Party No.1 had installed DG with capacity of only 2520 KVA in place of the required capacity of 3030 KVA. Accordingly the power produced by them is significantly lower than what was promised in the sales brochure. Opposite Party No.1 had promised Residents in the Sales Brochure that bathrooms would be fitted with bath tub and geyser. It was stated that the bathrooms were not as per the promised specifications. Opposite Party No. l had separately charged the Residents for parking slots; however, it had not included the right to parking in the conveyance deed of the flats. Further the lifts which were installed were not connected with intercom or any emergency hotline and also lifts were not maintained properly by Opposite Party No.1. The Automatic Rescue Devices (ARD) in the lifts was either not installed or was faulty. Fire Safety equipment installed by the Developer were non-functional and the Developer also had not installed Public announcement system (Public Addressing System) required to alert the Residents in the event of fire to evacuate the building. Some of the fire hoses were removed from the towers and being used by the workers of the Developer to carry water from one tank to another and the parks. There was severe rusting in the fire pipes and water seeped continuously through the same. Before handing over possession of the flats, Opposite Party No.1 coerced the Residents to sign a maintenance agreement with Opposite Party No.2, JMD Maintenance Services Private Limited. In spite of requesting for accounts, Opposite Party No.2 did not provide accounts of the maintenance expenses. As per the Haryana Apartment Ownership Act, the common area is owned by the Association of fiat owners and only they can authorize any agency to provide and collect maintenance agreement. The Complainant, vide legal notice dtd. 12/11/2013, highlighted the various defects and deficiencies in service with regard to 'JMD Gardens' and requested Opposite Parties No.1 and 2 to take steps within 15 days to rectify the deficiencies and also requested them to hand over the maintenance to Complainant No.1, after joint inspection of deficiencies. However, the Opposite Parties failed to take any steps to address the grievances of the Complainants. It was stated that after receiving the legal notice, the Developer had taken certain steps for rectification, however, the pace of the rectification work was very slow. The builder had not given any definite time line for rectification of the seepage. Aggrieved by the deficiency and unfair trade practice on behalf of the Opposite Parties, the Complainants filed the instant Consumer Complaint before this Commission with the following prayer:-

(2.) The Complaint was resisted by the Opposite Parties by filing written statement on the ground that the Complainant Association was not a 'Consumer' under sec. 2 (1) (d) of the Consumer Protection Act 1986, as the Complainant was not a voluntary Consumer Association as per Sec. -2 (1) (b) of the Consumer Protection Act. There are about 500 flats in the aforesaid project and this Association does not represent all the Residents/ unit Allottee of the project. It was contested that the Complainant had not approached this Commission with clean hands. The Complainant was guilty of 'supressio-veri,suggestion-falsi' as the Complainant had concealed the material facts and twisted certain facts. It was further stated that the Complaint was barred by limitation as the possession of the Flats was given during the years 2010, 2011 and 2012 and this Complaint was filed in 2014. The Complaint was also resisted on the ground that the Complaint included complicated questions of fact and this Commission did not have jurisdiction to entertain this Complaint and hence was not maintainable. On merits, it was stated that the Complainants had taken possession of flats after inspection and satisfaction. They had also given affidavits in respect of their satisfaction. There was no defect in the plumbing work and the construction of the flats was of good quality. Opposite Party No.1 had taken EDC charges as applicable. All the allottees were provided super area as agreed in the Agreement. Club Membership Fee was charged from the allotees for making the club operational. Opposite Party No.2 was handling the maintenance effectively. The Complainants forcibly took possession of the maintenance. They are, therefore, not entitled for any compensation towards maintenance. Opposite Party No.1 had installed the DG Set commensurate to the agreed power back up. Opposite Party No.1 had provided the area as per Agreement. Opposite Party No.2 charged security deposit for the purpose of maintenance and Opposite Party No.2 was maintaining the flats properly. There is no question of refund of security deposit. There was no provision in the Agreement that the Club Membership Fee was refundable. Opposite Party No.1 had provided all amenities as per Agreement. Opposite Party No.1 had constructed two towers under License No.3 to 12 of 2005 dtd. 22/7/2005.

(3.) Heard the Learned Counsel for the Parties and carefully perused the record. The learned Counsel for the Complainant submitted that almost all the towers had problem of seepage and water logging since the inception because of structural defects and poor quality of construction. It had not only affected the value of the flats but also had structural and safety issues. It was argued that the Architect Report showed that the quality of plumbing work done in the complex was of inferior quality, resulting in seepage and would have damaging effect on the structure. Learned Counsel submitted that Complainant No.1 had engaged an Architect firm to evaluate the condition of the towers. The Architect firm in its report had noted various flaws in construction and had suggested various steps to deal with the problem of seepage. The report under the heading "Common Areas" has computed a figure of Rs.9.05 crores that would be required to deal with the problem of seepage of all the towers. At the time of offer of possession, the residents were forced by Opposite Party No.1 to pay Contingency Fund for potential increase in External Development Charges. This interest free amount at the rate of Rs.50.00 per sq. ft was around Rs.1.00 lakh for each resident. The residents were not told about any such funds at the time of booking of the flats and were informed about this charge only at the time of signing of flat buyer's agreement. It was further argued that the amount collected by Opposite Party No.1 towards the External Development Charges, apart from the Contingency Fund, was in excess to the amount deposited by Opposite Party No.1 towards the External Development Charges. Opposite Party No.1 collected the External Development Charges at the rate of Rs.90.00 per sq. ft. totaling Rs.9,34,32,060.00 for all the residents and as per RTI response dtd. 17/5/2013 from Town and Country Planning Department, Haryana, the total sum deposited by Opposite Party No.1 with the Authority towards External Development Charges was only Rs.8,64,94,000.00 which comes to Rs.83.32 per sq. ft. Opposite Party No.1, therefore, was liable to return the excess amount with interest to the Complainant Association. Learned Counsel submitted that Opposite Party No.1 promised various facilities and amenities like additional DG sets to provide the promised power backup of 6.25 KVA per flat, Water Harvesting Equipment, Fire Safety Equipment, Amphitheater, Community Center at the time of booking of the flats. However, none of these facilities were provided. Learned Counsel further submitted that in direct contravention to Rule 3 of the Haryana Apartment Ownership Rules, 1987, requiring developers to disclose "built up area" in Form of Declaration, Opposite Party No.1 filed an improper Deed of Declaration Form and disclosed only "Approx. Super Area" in the sale. It was stated that Opposite Party No.1 cheated the Residents by subsequently changing the definition of Super Area. Clause 3.1 of the Flat Buyer's agreement did not have balcony in the definition of super area but was included in the sale deed. It was further submitted that Opposite Party No.1 coerced the Residents to sign a Maintenance Agreement with its sister concern/Opposite Party No.2. The total amount collected from the Residents as Interest Free Maintenance Security Deposit was approximately Rs.5.00 crores. Even the Maintenance Agreement which was for a period of 3 years had expired. The Residents requested Opposite Party No.2 several times to handover the maintenance to Complainant No.1 alongwith the Security Deposit. However, Opposite Party No.2 had not handed over the maintenance charge alongwith the Security Deposit to Complainant No.1 and is continuing under an expired Maintenance Agreement with increased maintenance charges. It was further argued that Opposite Party No.1 charged Club Membership Fee of Rs.50,000.00 per head and had failed to return this amount to the Complainants. Opposite Party No.1 failed to provide the DG sets as promised to meet out the power back up. It was submitted that Opposite Party No.1 had collected preferential location charges from the Residents of L and M block Towers of JMD Gardens, who purchased units in lower floors on the basis of the assurance given by Opposite Party No.1 that the front area would be an open area. However, after collecting preferential location charges, Opposite Party No.1 started constructing new towers which had blocked air and sun light and caused inconvenience. The maintenance provided by Opposite Party No.2 was of extremely poor quality.