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Unfair Trade Practice Ruled: IRWO to Compensate Complainant in Chandigarh District Commission Decision

In a recent landmark decision, the esteemed bench of the Chandigarh District Consumer Disputes Redressal Commission-I, presided over by Pawanjit Singh (President), Surjeet Kaur (Member), and Suresh Kumar Sardana (Member), firmly held the Indian Railway Welfare Organization (IRWO) accountable for imposing additional charges post flat property booking. The Commission, in its resolute stance, directed IRWO to pay a substantial compensation of Rs 30,000 to the aggrieved complainant, deeming such financial demands to be an unfair trade practice. Furthermore, the commission reiterated that arbitration clauses within agreements cannot limit the jurisdiction of consumer forums.
Background and Key Details:

The genesis of the case dates back to when Shyam Sunder Garg, the complainant, expressed his interest and subsequently booked a flat in the "Rail Vihar" housing project, an integral part of the prestigious Railway Group Housing Scheme situated in Zirakpur, Punjab. Initially quoted at ₹42,00,000, IRWO later revised the cost to ₹46,80,000. The complainant diligently paid a total sum of ₹49,98,211, inclusive of interest on delayed payments, to secure his home. However, complications arose when IRWO unilaterally demanded an additional ₹1,48,390 from the complainant. The rationale behind this demand pointed to "subsidy for EWS houses" and "escalation in labor and material prices."

The complainant, vehemently contesting this demand, contended that it was raised without his consent, post full payment, and subsequent possession of the flat. He argued that such a demand was both illegal and unwarranted, clearly amounting to an unfair trade practice. Consequently, he lodged a formal consumer complaint with the Chandigarh District Consumer Disputes Redressal Commission-I.

The Commission's Analysis and Ruling:

The Commission meticulously examined the facts of the case and highlighted the complainant's full payment for the flat and subsequent possession as undisputed. The subsequent demand for an additional payment without prior consultation or consent was, unequivocally, viewed as unfair and arbitrary by the commission.

Addressing IRWO's legal contentions regarding jurisdiction and maintainability, the Commission cited relevant legal precedents, specifically the case of Aftab Singh Vs. Emmar MGF Land Limited & Anr. (Case No.701 of 2015), wherein the Supreme Court firmly established that arbitration clauses in agreements could not curtail the jurisdiction of consumer forums.

In line with this, the District Commission ruled in favor of the complainant, ordering IRWO to refund the unjust demanded amount of ₹1,48,390, along with interest at a rate of 9% per annum from November 11, 2022, onwards. Additionally, IRWO was explicitly prohibited from imposing similar demands on the complainant in the future. Furthermore, the Commission awarded the complainant ₹20,000 as compensation for the mental distress and harassment endured during this ordeal, along with ₹10,000 to cover the litigation costs.

This recent groundbreaking judgment by the Chandigarh District Consumer Disputes Redressal Commission-I significantly underscores the imperative of fair trade practices within the real estate sector. The decision, setting a vital legal precedent, serves to accentuate the rights of consumers in transactions with builders, emphasizing the illegitimacy of unilateral demands for additional payments and the legal repercussions associated with such actions.

Case: Shyam Sunder Garg vs. Indian Railway Welfare Organization

Case No.: CC/354/2021