MRTPC slams DLF again for unfair trade practice
As it battles pre-IPO hiccups in a volatile market, construction major DLF has caught again by MRTPC.
By PTI |
NEW DELHI: As it battles pre-IPO hiccups in a volatile market, construction major DLF was caught on the wrong side, the second time in the last three months, by Monopolies and Restrictive Trade Practices Commission who found the builder guilty of "unfair trade practice".
DLF, which faced similar verdict in May for billing customers for escalation charges, has now been ordered to return the money of a customer, with interest, who chose to cancel his allotment when asked to cough up more than originally told.
"The respondent (DLF) is directed to refund the applicant the component of the earnest money," MRTPC acting Chairman M M K Sardana said in his order this week. The Commission also directed the company to pay nine per cent interest to its customer.
MRTPC slammed DLF for altering the basic terms of its Apartment Buyer's Agreement and termed it as "unforeseen burden".
"The respondent (DLF) is a very renowned builder and should normally not be incorporating clauses, in which balance is tilted towards it," MRTPC said.
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In their appeal, Brigadier Umang Seth and Ekta Seth had accused DLF of "arbitrarily deducting money" in their DLF Regency Park, Gurgaon, scheme. Irked, they chose to cancel their flats rather than pay the cost escalation charges.The duo had entered into agreement an agreement with DLF in 1993 for a flat in DLF Regency Park. As per the agreement, the Seths were to pay Rs 16.37 lakh in 42 installments in 10 years. DLF was supposed to hand over the possession of the flat in three years or by 1996.
On the other hand, after two years of delay, in 1998, DLF demanded an extra sum of Rs 4.21 lakh "towards cost escalation" and asked them to pay this in four bi-monthly installments of Rs 1.05 lakh.
Feeling aggrieved, the Seths cancelled the allotment. Later DLF returned the money but arbitrarily deducted Rs 1.8 lakhs on flimsy grounds, they alleged.
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Seth knocked the doors of the Commission, praying it to direct DLF to return his forfeited sum as well as cough up compensation for "loss and injury suffered".During the proceeding of the Commission, the construction major contended that Seth had terminated the agreement and had already encashed the cheque given by it. "Now he cannot be regarded as consumer and is not competent to file the suit," it argued.
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It also said that in the Apartment Buyer's Agreement, it has mentioned word "proposed to deliver" and not "would be delivered" and thus it did not incur any liability if flats were not delivered in time.It also pleaded that delay was due to various factors that were out of its control such as not getting timely approval from the government authorities.
"Delay in granting approval of the building plans and the occupation certificate would also not bring any liability on us," DLF said, citing clauses of the agreement.
The Commission rejected the DLF arguments saying," pleas taken by the respondent have no weight". It also rejected the DLF contention that the case was not maintainable because Seth was not a customer after canceling his allotment.
MRTPC said that deduction was made after cancelling the allotments and thus the cause of action arose after that.
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