Apex Court says allegations of monopolistic trade practices against DLF Universal stands unproved; however orders handing over of possession of flats to buyers

Read Judgment: B.B. Patel & Ors. V. Dlf Universal Ltd. 

Pankaj Bajpai

New Delhi,  January 27, 2022: The Supreme Court has reiterated that Section 12-B of the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) empowers the Commission to grant compensation only when any loss or damage is caused to a consumer as a result of a monopolistic, restrictive or unfair trade practice. 

A Larger Bench of Justice B.R Gavai, Justice L. Nageswara Rao and Justice B.V Nagarathna therefore observed that when there is no unfair trade practice on the part of Dlf Universal Ltd. (Respondent), then compensation sought by B.b. Patel & Ors. (Appellants) on basis of such allegations cannot be granted. 

The observation came pursuant to an appeal challenging the judgment, whereby the Monopolies and Restrictive Trade Practices Commission, New Delhi dismissed a complaint filed by Appellants u/s 36-A, 36-B(a) and (d), 36-D and 36-E r/w/s 2(i) and 2(o) of the MRTP Act. 

Going by the background of the case, an advertisement was issued by Respondent proposing attractive schemes of payment for sale of group housing apartments/ flats namely, “Beverly Park-I” at Qutab Enclave Complex in Gurgaon. Though the possession of the flats was to be handed over to the appellants in January 1996, the construction commenced only in June, 1996, and the appellants also continued to make payment of the installments as per schedule of payments annexed with the Apartment Buyer Agreement (ABA). Later, the Respondent intimated the Appellant that the apartments were ready for use and occupation, and therefore, requested to make payments of outstanding dues and complete the documentation work. Responding to same, the appellants informed the respondent that they had paid money in excess of what was due and sought refund of the excess amount paid. Thereafter in 1999, the respondent cancelled the ABA as the outstanding amount was not paid, and also issued cheques refunding the amounts paid for the flat by the appellants which were not encashed by the appellants.

The appellants accordingly filed a complaint u/s 10(a)(i) IV, 36A, 36B(a) and (d), 36D and 36E r/w Sections 2(i) and 2(o) of the MRTP Act along with Regulations framed thereunder. The contention of the appellants relating to monopolistic practice was rejected by the Commission. The Commission was also of the view that the allottee was entitled to issue notice to the company terminating the ABA, in case, respondent fail to deliver possession within the time. The Commission therefore concluded that since there was no misrepresentation made by respondent and there was no material produced by the appellants to show that they entered into the agreement under duress or fraudulent representation, delay in handing over possession of the apartments to the appellants did not amount to an unfair trade practice. 

After considering the submissions, the Apex Court found that though there has been a delay in completion of the project beyond three years, however, the appellants did not issue any notice for termination of the agreement. 

On the other hand, notices issued by the appellants related to demand of extra costs, and they did not, at any point of time, make a grievance relating to delay in handing over of possession of the apartment, added the Court. 

Speaking for the Bench, Justice Rao found that in the present case, though there is a clause in the ABA which mentioned that the possession has to be handed over within a period of two and half to three years from the date of ABA, it cannot be said that time was made the essence of the contract as a reasonable extension of time for delivery was permissible as per the ABA. 

There was no intention on the part of the appellants to insist on time being the essence of contract as they did not terminate the ABA due to delay in handing over possession of the apartments which they could have in accordance with the ABA, added the Bench. 

“The appellants in this case are essentially seeking possession of the apartments by declaration of termination of the agreement by the respondent to be void, without having to pay any money towards extra charges or even the basic sale price. There has been no specific reference to any clause in 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 it being an unconscionable contract”, observed the Larger Bench.  

The Larger Bench further noted that even though there is an averment in the complaint that ABA is an unconscionable contract opposed to public policy as a consumer has no bargaining power and is an easy victim of unfair trade practice, however, there is no reference to any clause of the ABA, in particular, to substantiate the allegation. 

Accordingly, the Apex Court upheld the order of MRTP Commission, however, in the interest of justice, directed the respondent to handover possession of the flats to the appellants on payment of Rs.25,00,000/- for each flat by the appellants.