SKIPPER BHAWAN Vs. SKIPPER SALES PVT LTD

JUDGEMENT

(1.) This complaint has been filed by an Association whose full name has been given in the cause title of this petition, on behalf of its Members as well as of the flat buyers in the complex. According to the Complainant Association, in 1977 Opposite Party No. 1 M/s Skipper Sales (Pvt.) Ltd. (for short the Company) advertised that they would construct multistoreyed building on a plot of land at 22, Barakhamba Road, New Delhi and invited applications from the public for allotment of flats in that building to be constructed. The said Company has since sold flats to a large number of persons under specific individual agreements. Based on these agreements various flat buyers were required to pay advances in instalments towards the construction of the building as it progressed upto a specific stage. Barring exceptions the total amount paid by each one of the flat buyers is equal to 95 per cent of the amount purported to be total cost of the said flats and represents in full the amount the Opposite Party Company has called upon the Members to pay so far. The last 5% instalment to make up the advance amount to 95% of the total payment was asked for from the flat buyers in 1986 and therefore, it was presumed that the building was fully completed to the extent of 90% by the end of 1986. In fact the Opposite Party No. 2 vide one of their letters in November, 1986 to all the flat buyers, committed that the building was likely to be ready for occupation by 30th April, 1987 at the latest. Upto June, 1986 the various flat buyers in this complex had paid more than Rs. 8.00 crores to the Opposite Party No. 1 Company for purchased of commercial office spaces, show rooms, parking spaces etc. booked by them. In June, 1986 there was dispute between the Directors of the Company namely Shri Tejwant Singh and Harpreet Singh resulting in transfer of all assets and liabilities, pertaining to 22 Barakhamba Road, later known as Skipper Bhavan from Opposite Party No. 1-Company to Opposite Party No. 2-M/s. Skippers Towers Pvt. Ltd. under the stewardship of Shri Tejwant Singh.

(2.) To formally obtain the concurrence of all the flat buyers to this change and also to concur to the transfer of all the assets and liablities to the other Company two letters were written by Opposite Party No. 1 to all the flat buyers. As advertised and promised verbally by the Opposite Party Company the reasonable period of completion was to be of 2 to 3 years at the maximum from the time of booking. In 1981 Opposite Party No. 1 addressed a letter to all the flat buyers asking them to pay amount of Rs. 74/- per sq. ft. within 7 days of issue of their letter towards the amount to be paid by the Company to Land & Development Office as conversion charges of the area from domestic to commercial. It was a condition in the allotment agreement that "in case the Land & Development Office charges beyond Rs. 1,000/- per sq. yard then the entire difference, including so called penalities and interest, shall be borne by flat buyers in proportion to the ratio that their area of flat bears to the total area of other flats in the building". The promoter has fraudulently not calculated the area for himself and the owners of plot No. 22, Barakhamba Road, who own 7% of the covered area, while working out the charge of Rs. 74/- per sq. ft., thus cheating hapless public. By mid 1986 at the time of partition of Opposite Party No. 1 the said party had collected a sum of Rs. 75,74,601/- from most of the flat buyers on this account but had paid only a sum of Rs. 10.00 lakhs to the Land & Development Office. The total amount collected so far under this head will be well over Rs. 1.00 crore. By not paying the further amount to the Land & Development Office the builders have duped the flat buyers by threats and coercion. The builders are liable to pay interest at the rate of 18% per annum on the amounts so collected from the various flat buyers since 1981 or its exact date of collection till it is deposited with the Government. If the amount is not deposited, the Opposite Party No. 2 be directed to refund the entire amount less the proportionate share of Rs. 10.00 lakhs paid so far, to various flat buyers with all the interest thereon upto the date of payment. Opposite Party No. 2 started asking for additional amount for different frills to be provided in the building and thus asked for an additional amount of Rs. 77.60 per sq. ft. of the flat area to be paid for fixing marble on the elevation of the building on all sides, marble flooring in the lobbies and granite/Dholpur stone in various other places and promised that the building will be fully ready by 30th April, 1987 for occupation. These additional architectural facets were neither part of the original agreement nor needed, but the Opposite Party No. 2 forcibly thrust these upon the flat buyers and extracted money from almost all of them on the threat of cancellation of their flats. Delhi High Court in Suit No. 2217/1987 titled Jaswinder Singh v. Skipper Towers Pvt. Ltd. vide Order dated 9th December, 1988 ordered that it was the builder's responsibility to complete the elevation without liability of the flat buyers. Therefore, the flat buyers are entitled to the refund of Rs. 77.60 per sq.ft. realised by the builder. In December, 1986 Opposite Party No. 2 asked for additional amount of Rs. 91.60 per sq. ft. of the area of the flat on the ground that aluminium doors with glazing of thick imported smoked glass and tinted glass in the windows all round the building on the ground floor were to be provided and in the case of flats on the upper floors Rs. 15/- per sq. ft. area of the flats were asked to provide black glasses in all the windows. These charges are highly exorbitant and were not part of the agreement. Thus almost Rs. 20.00 lakhs of extra money has been collected by Opposite Party No. 2 illegally and the flat buyers are entitled to the refund of this amount. On January, 19870pposite Party No. 2 confirmed that the building was making steady progress and that earnest efforts were being made to complete it by mid 1987. The Opposite Party No. 2 also asked for a further sum of Rs. 52.40 per sq. ft. on the ground that fire fighting equipment and arrangement were to be provided. For this purpose the builders have collected amount at exorbitantly high rates. In the adjacent building located in the same area at 18, Barakhamba Road charges paid by all the flat owners worked out to approximately Rs. 17.25 per sq. ft. Thus there has been overcharging to the extent of Rs. 35/per sq. ft. amounting to approximately Rs. 52 lakhs for the entire building and the Opposite Party No. 2 is liable to refund this excess amount to the Complainants. In June, 1987 Opposite Party No. 2 demanded a sum of Rs. 9.00 per sq. ft. of the area of each flat towards the payment of initial deposit to be remitted to New Delhi Municipal Corporation for providing electricity connection to the building. Till now no amount has been deposited with the said Corporation though Rs. 14.00 lakhs have been collected on this ground.

(3.) It is further the case of Complainant that per the original agreement for sale all areas were initially sold to the flat buyers as 'covered area' which has been defined in the agreement as 'area under internal walls and the periphery walls and the columns comprising the flat, half of the area will be taken in case of common walls between the two flats'. In the meantime against a total area of almost 1.00 lakh sq. ft., excluding the basement and mezanine floor, the builder has over sold more than 50% of the area totalling the sale of more than 1.5 lakhs ft. to various flat buyers. This total sale is without counting the 7-% of the total area which the Opposite Party No. 2 has separately earmarked and provided to the colloborator as part of the original colloboration agreement. To cover the over selling of the total space to the tune of 50% or above the Opposite Party No. 1-Company very cleverly manipulated the above definition of the 'covered area' by introducing the words "plus proportionate share of the common area". Thus the "internal area" vary from floor to floor depending upon the quantum of area covered by those common spaces on that particular floor. Thus by enlarging the scope of the "common area" to gain maximum advantage for themselves and thereby transfer on the shoulders of the flat buyers, the additional burden of the space occupied by various centralised utilities, essential services and other functional facilities which the Opposite Parties as builders are obliged to provide as an integral part of the building. Some of the examples of such areas are those utilised for locating the electrical sub-station, pump room, fire fighting room, underground water sumps, overhead water reservoirs, service and spare rooms, stoors, areas occupied by lifts, stair hall and the stairs etc. The price of these spaces must have been included in the initial pricing of the flats. The total area covered by the various common spaces on each floor should be approximately 15% to 18% of the covered area on that floor whereas the Opposite Party No. 2 have very mischievously and with fraudulent intent, to extract more money from the hapless flat buyers by reducing their covered areas, have unscrupulously increased this additional coverage to almost 40% or more. Thus a flat buyer who had originally contracted for 500 sq. ft. of the covered area will not even hope to get 300 sq.ft. of area within the periphery walls. As per the sanctioned plan of the NDMC the total area allowed for coverage on the ground floor is 9061.53 sq. ft. only and it is surprising how by 1988 the area of the same space increased to 13599 sq. ft. Thus the Opposite Party No. 2 Company has fraudulently sold more space by reducing the "covered area" within the periphery walls which would ultimately be handed over to the flat buyers. To compensate for the loss of space utilised for fire fighting purposes and other statutory benefits the Opposite Parties have constructed additional floor but at the same time they have included these statutory areas as common spaces and have planned to pass on the extra burden to all the flat buyers thereby reducing the effective space within the periphery walls. The Opposite Parties be directed to refrain from charging for the common functional facilities from the various buyers. Besides, in violation of the sanctioned plan the Opposite Parties have encroached upon some of the open spaces and fraudulently sold the same to the flat buyers for office/commercial space. The Opposite Parties have inordinately delayed the completion of the building, its handing over and subsequent usage by the various flat buyers. They themselves have been making a regular use of this building not only for their fully air-conditioned offices but also for commercial purposes from where they are running a full fledged Travel Agency called "Gulliver Travels" and also offices of all the Skipper Group of Companies. This utilization of the building has been going on since April, 1986 and the entire upper basement totalling an area of 18264.6 sq.ft. has been in continuous use of the Opposite Parties. Taking a nominal rent of Rs. 15 per sq. ft. the total benefit derived by the Opposite Parties is to the tune of Rs. 2,73,969/per month of rental value. Thus from 1st April, 1986 till 31st March, 1991 the Opposite Parties have already made a financial gain to the tune of Rs. 1.644 crores which otherwise they would have had to pay as rent. This amount is exclusive of the profits accrued to the various firms of the Opposite Parties including the Travel Agency. According to the agreement arrived at between Shri Vijinder Singh (Colloborator), Shri Tejwant Singh and Shri Harpreet Singh at the time of transfer of all assets and liabilities of Opposite Party No. 1 to Opposite Party No. 2 no area on the 4th floor is to be sold to any of the buyers as it is reserved for the colloborator. Opposite Party No. 2 has fraudulently and in violation of the agreement sold a number of flats to various flat buyers on the 4th floor thereby very bluntly and cleverly cheating the hapless buyers. The Opposite Parties be directed that space is allotted to all the flat buyers as per their agreements. Due to the overselling of the space, in case any of the flat buyers cannot be accommodated, the space out of almost one complete floor which is being exclusively held by the Opposite Party No. 2 their personal use, be taken over from them and allotted to the remaining flat buyers who are left out. The plans were sanctioned by the NDMC sometime in 1980 but upto this time building has not been completed. Vide letter dated 13th November, 1990 Opposite Party No. 2 held out that possession of the flats will be delivered to the flat buyers in the month of December, 1990. The Opposite Parties have been deliberately and intentionally conveying incorrect progress of the building to all the flat buyers with the sole aim of extracting more and more money. No amount has been remitted to NDMC for electric connection charges though the amount for the same has been collected by the Opposite Parties from all the flat buyers. On query by the Complainants, the Chief Fire Officer, New Delhi informed them that no objection certificate has not been issued so far. For the last 5 years the building is almost 90 to 95% complete but the final completion is wilfully dragged by the Opposite Parties. Though on the application filed by the colloborators the High Court of Delhi has issued a Stay Order against the handing over of possession to any of the flat buyers, but the Opposite Parties have physically handed over the flats to some of the flat buyers in flagrant contravention of the said Order after they had met the unreasonable demands of the Opposite Parties and cleared all their alleged dues. The members of the Complainant Association who had booked flats/office spaces/ show rooms for either renting out to derive some income from the investment or for their own use and occupation to open new office/ show room etc. or to shift their existing one from less known or disadvantageous places have suffered because of lack of any income for the past 9 to 10 years. Their investments have got blocked and they have undergone mental torture.