Subject Matter : One sided Agreements
Relevant Section : Consumer Protection Act, 1986
Section 2(r): “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice.
Key Issue : Are 'One sided agreements' legally valid?
Citation Details : Belaire Owner's Association vs. DLF Limited Haryana Urban Development Authority Department of Town and Country Planning, State of Haryana (12.08.2011 - CCI): MANU/CO/0044/2011
Summary Judgment :

Facts: The informant in this case has alleged unfair conditions meted out by a real estate player. It has been alleged that by abusing its dominant position, DLF Limited has imposed arbitrary, unfair and unreasonable conditions on the apartment. The informant has submitted that as the Apartment Buyer's Agreements were signed months after the booking of the apartment and by that time the allottees having already paid substantial amount, they hardly had any option but to adhere to the dictates of DLF. In this case, DLF had devised a standard form of printed "Apartment Buyer's Agreement" for booking the apartments and a person desirous of booking the apartment was required to accept it in 'toto' and give his assent to the agreement by signing on the dotted lines, even when clauses of the agreement were onerous and one-sided.

Held: The Court observed that while heavy penalties were imposed in the agreement for default of allottee, there were insignificant penalties on DLF for its own defaults. A reference was made to clause 35 of the agreement, which shows abuse of dominance. The Commission considers that the defaults can be on the part of the company as well on the part of the allottees and the agreement should provide for defaults of both the parties and the agreement must be equitable in dealing with both the sides and levy of interest/penalty should of equal level on both sides.
The Supreme Court has recently held that one-sided clauses in the Apartment Buyer’s Agreement constitutes unfair trade practice and such terms cannot bind in any Act.

Subject Matter : Delay in delivery of possession of Flats
Relevant Section : Section 31: (1) Any aggrieved person may file a complaint with the Authority or the adjudicating officer, for any violation of this Act against any promoter allottee or real estate agent, as the case may be.
Explanation: "person" shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force.
(2) The form, manner and fees for filing complaint under sub-section (1) shall be such as may be specified by regulations.
Key Issue : a. Can a builder give alluring advertisement promising delivery of possession of the constructed flat to the consumer within the stipulated time, and, on his failure, contend that the delay in construction due to government procedures should not be the ground for grant of compensation to the consumer?
b. Whether the consumer should suffer by paying escalation cost due to such delay?
Citation Details : Kamal Sood vs. DLF Universal Ltd. (20.04.2007 - NCDRC): MANU/CF/0069/2007
Summary Judgment :

Facts: Brig. Kamal Sood, who was serving as Commandant 14 Gorkha Training Centre, Himachal Pradesh, approached the State Consumer Disputes Redressal Commission, Haryana, Chandigarh, contending that M/s. DLF Universal Ltd. has indulged in unfair trade practice and there is deficiency in service on its part because there was delay in handing over possession of the flat as well as unjustified recovery of so-called escalation charges from the complainant. He, therefore, sought direction that the DLF pay compensation to him. It was contended that the DLF published an advertisement for booking apartment in DLF Qutab Enclave. As per the said brochure, the DLF was contemplating construction of apartments known as DLF Hamilton Court and DLF Regency Park. There was a specific statement, "And remember, now all prices are ESCALATION FREE. So, the price you book at is the price you pay, irrespective of what it might cost DLF".

Held: a. The NCDRC observed that the aforesaid practices were unfair trade practice on the part of the builder to collect money from the prospective buyers without obtaining the required permissions such as zoning plan, layout plan and schematic building plan. NCDRC stated that it was the duty of the builder to obtain the requisite permissions or sanctions such as sanction for construction, etc., in the first instance, and, thereafter, recover the consideration money from the purchaser of the flat/buildings.
b. In such a case, if there is any express promise that the premises would be delivered within the stipulated time, and, if not done so, escalation cost is required to be borne by the builder.

Subject Matter : Force majeure
Relevant Section : Section 18: (1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,—
(a) in accordance with the terms of the agreement for sale be duly completed by the date specified therein; or
(b) due to discontinuance of his business on account of suspension or revocation of the registration, he shall be liable on demand to the allottees, who wish to withdraw from the project, to return the amount received by him in respect of that apartment, plot, building, with interest;
(2) The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land of project; and the claim for compensation under this subsection shall not be barred by limitation;
(3) If the promoter fails to discharge any other obligations, he shall be liable to pay such compensation to the allottees.
Key Issue : Can a condition may be made certain by evidence about a force majeure clause?
Citation Details : Chand Rani (Dead) by Lrs. vs. Kamal Rani (Dead) by Lrs. (18.12.1992 - SC): MANU/SC/0285/1993
Summary Judgment :

Facts: An agreement for sale was entered into between Kamal Rani and Chand Rani through her husband, Niranjan Nath. Under this, Kamal Rani agreed to sell her house and property in favour of Chand Rani. On the date of execution a sum of Rs. 30,000 was paid by way of earnest money. The agreement stipulated that a further sum of Rs. 98,000 was payable within 10 days of the execution of the agreement. The balance of Rs. 50,000 was to be paid at the time of registration of sale deed. It was agreed between the parties that Kamal Rani, the vendor would redeem the property by paying off a loan of Rs. 25,000 out of a sum of Rs. 30,000 paid at the time of execution. The property was mortgaged with the Life Insurance Corporation of India. The vendor was also to obtain the income-tax clearance certificate. At the time of this agreement the first floor of the house had been let out to tenants. It was stipulated in the agreement that the vendor would hand over documents pertaining to the property in the suit together with vacant possession of the property by 30.9.71. It was further agreed that the amount of Rs. 30,000 would stand forfeited in favour of the vendor should the vendee fail to pay the sale consideration and get the sale deed registered within the agreed time. Based on this agreement Chand Rani and her husband filed for specific performance. It was alleged that Kamal Rani failed to perform her part of the contract. Since the plaintiff had failed to pay the sum within ten days from the date of the agreement, the agreement stood annulled and the sum of Rs. 30,000 stood forfeited. Since the defendant failed to comply with this demand the suit came to be filed claiming specific performance of the agreement or in the alternative, damages.

Held: The Supreme Court elucidated on the concept of “force majeure”. Difficulties have arisen in the past as to what could legitimately be included in “force majeure”. Judges have agreed that strikes, breakdown of machinery, which, though normally not included in “vis major” are included in “force majeure”. An analysis of rulings on the subject into which it is not necessary in this case to go, shows that where reference is made to “force majeure”, the intention is to save the performing party from the consequences of anything over which he has no control. This is the widest meaning that can be given to “force majeure”, and even if this be the meaning, it is obvious that the condition about “force majeure” in the agreement was not vague. The use of the word “usual” makes all the difference, and the meaning of the condition may be made certain by evidence about a force majeure clause, which was in contemplation of parties.

Subject Matter : Adherence to sanctioned plans and project specifications by the promoter.
Relevant Section : Section 14:(1) The proposed project shall be developed and completed by the promoter in accordance with the sanctioned plans, layout plans and specifications as approved by the competent authorities.
Key Issue : Can the opposite party also held liable for the alternations in project?
Citation Details : Pankaj Aggarwal and Ors. vs. DLF Gurgaon Home Developers Private Limited (12.05.2015 - CCI): MANU/CO/0038/2015
Summary Judgment :

Facts: Pankaj Agarwal & Anr. v. DLF Gurgaon Home Developers, the builder had raised floors without any intimation to the home buyers. Held by CCI, on complaint of the alleged act, CCI was of the view that the builder held a position of dominance in the relevant market of services and made a stern advisory remark that it was the duty of DLF Developers to disclose that it proposed to increase the number of floors and apartments, so that the allottees could have taken valid objections to it.

Held: The Court in exercise of powers under section 27(a) of the Act, the Commission directs the Opposite Party and its group companies operating in the relevant market to cease and desist from indulging in the conduct which is found to be unfair and abusive in terms of the provisions of section 4 of the Act. With regard to penalty, the Commission is of the view that since a penalty of Rs. 630 crores has already been imposed on the Opposite Party in the Belaire"s Case for the same time period to which contravention in the present cases belong, no financial penalty under section 27 of the Act is required to be imposed. In view of the totality and peculiarity of the facts and circumstances, the Commission did'nt deem it necessary to impose any penalty on the Opposite Party in this cases.