State Consumer Disputes Redressal Commission
Chandigarh Adminstration vs Harvinder Singh (Huf) on 2 June, 2022
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Appeal No. : 105 of 2020 Date of Institution : 20.07.2020 Date of Decision : 02.06.2022 Chandigarh Administration through Finance Secretary, U.T., Chandigarh, Sector 9, U.T., Chandigarh. The Estate Office, U.T., Chandigarh, Chandigarh through Estate Officer, Sector-17, Chandigarh. ...Appellants/opposite parties V e r s u s Harvinder Singh (HUF) through Harvinder Singh Thakur Singh Ranjit Singh Pritpal Singh All sons of Sh. Avtar Singh r/o House No.536, Sector 33-B, Chandigarh. .....Respondents/Complainants BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT. MR.RAJESH K. ARYA, MEMBER.
Present:- Sh.Rajinder Singh, Govt. Pleader for the appellants. Sh.Harvinder Singh, Respondent No.1 in person. Respondents no.2 to 4 exparte vide order dated 26.11.2020. PER JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT M.A. No.484 of 2020:-
Alongwith this appeal, this application has been filed by the applicants/appellants for condonation of delay of 95 days in filing the appeal. Reply to said application was filed by respondent no.1 For the reasons stated in the application, we are of the considered view that the applicants/appellants have been able to satisfy that there had been a sufficient cause for not preferring an appeal within the stipulated period. In this view of the matter, this application stands allowed and the delay of 95 days in filing the appeal is condoned. Accordingly, this application stands dispose off.
Appeal No. 105 of 2020:-
This appeal has been filed by the opposite parties (now appellants before this Commission), feeling aggrieved by the order dated 02.03.2020 passed by the District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (now the District Commission), whereby the consumer complaint bearing no.51 of 2018 filed by the complainants-respondents was partly allowed as under:-
".... In view of the above discussion, the present consumer complaint succeeds and the same is accordingly partly allowed. OPs are directed as under :-
to convert the dwelling unit No.536, Sector 33-B, Chandigarh from leasehold to freehold as per the 1996 Rules on acceptance of the amount as per relevant Rules.
pay Rs.20,000/- to the complainants as compensation for causing mental agony and harassment to them;
to pay Rs.10,000/- to the complainants as costs of litigation.
This order be complied with by the OPs within thirty days from the date of receipt of its certified copy, failing which, they shall make the payment of the amount mentioned at Sr.No.(ii) above, with interest @ 9% per annum from the date of this order, till realization, apart from compliance of directions at Sr.No.(i)&(iii) above......."
The District Commission noted down the following facts of the complainant in the order impugned:-
"...........H.No.536, Sector 33-B, Chandigarh was purchased in open auction and was allotted to deceased Sh.Avtar Singh (HUF), father of the complainants and husband of deceased Smt. Pritam Kaur. Complainants are sons of deceased Sh. Avtar Singh and now complainant No.1 is the karta of the HUF. Complainants case is, their father, Sh. Avtar Singh and mother, Smt. Pritam Kaur had expired on 22.5.2006 and 28.2.2017 respectively. At the time of auction, premium of Rs.8,02,000/- on lease hold basis was paid and it was mentioned in the allotment letter, complainants will have to pay annual ground rent i.e. Rs.20,050/- per annum. However, OP-2 wrote a letter dated 9.4.1987 to the Executive Engineer where it was mentioned, Sh.Avtar Singh (HUF) has paid 25% of the premium and subsequent thereto, possession was handed over to deceased Sh. Avtar Singh. Lease deed dated 16.4.1993 was also executed inter se Sh. Avtar Singh (HUF) and the OPs. Further averments are, Chandigarh Administration had framed a policy "Chandigarh Conversion of Residential Leasehold Land Tenure into Freehold Land Tenure Rules, 1996" (hereinafter referred to as 1996 Rules). As per clause 4(d) of the 1996 Rules, lessee opting for conversion from leasehold to freehold would be resolved by paying ground rent and 50% of the unearned increase. Per 1996 Rules, on being opted, OP-2 vide letter dated 24.4.2012 had asked the complainants to deposit the amount of Rs.41,565/- on account of interest. The same was deposited by the complainants and OP-2 issued the No Due Certificate on 3.5.2012. The complainants again applied for conversion of the plot and requested OP-2 for intimating the conversion fee and in pursuance to the same OP-2 asked the complainants to deposit draft of Rs.1,07,811/- alongwith requisite documents, which was complied with by the complainants. OP-2 vide letter dated 5.10.2012 asked the complainants to deposit a sum of Rs.83,042/- still due upto 6.9.2012 on ground of conversion fee and ground rent, which was paid by the complainants. However, the complainants asked OP-2 to explain the basis of further demand of Rs.72,140/- on account of conversion fee. Later on vide letter dated 11.2.2013 complainants were informed their request for conversion from leasehold to freehold would be considered only when all the co-owners applied jointly. Their further case is OPs raised frivolous objection by referring to letter dated 5.10.2012 from the Govt. of India where it was mentioned land acquisition and its subsequent disposal should not be below the market rent without holding an auction. It was contrary to the 1996 Rules referred hereinbefore. Further averments are, OPs stopped conversion on the basis of letter dated 18.6.2013 from the Finance Department as the conversion rate had to be revised by the Chandigarh Administration. Hence, the complainants alleged deficiency in service on the part of the OPs and filed the present consumer complaint for directing the OPs to immediately convert the house in question from leasehold to freehold on old rates; pay compensation of Rs.5.00 lakh for mental and physical harassment and legal expenses of Rs.25,000/-......"
Reply filed by the opposite parties was noted down by the District Commission in the order impugned as under:-
"......OPs contested the consumer complaint, filed their joint written reply and, inter alia, raised preliminary objections, complainants did not apply jointly and complainant No.1 as HUF is having no recognition in the record of the OPs; complainants not being consumer and they were asked to apply jointly and this objection was not dealt with and, therefore, demand drafts were returned to the complainants as decision was taken by the Chandigarh Administration on 10.5.2013 not to allow any conversion. OPs denied there was any deficiency in service on their part and averred the amount had already been refunded. On these lines, the cause is sought to be defended........"
In the rejoinder filed, the complainants reiterated all the averments contained in their complaint and controverted those, contained in the written version of the opposite parties.
The contesting parties led evidence before the District Commission.
The District Commission after hearing the contesting parties and on going through the material available on record, partly allowed the consumer complaint, in the manner stated above, while giving directions to the opposite parties to transfer/convert the ownership of the dwelling unit No.536, Sector 33-B, Chandigarh from leasehold to freehold, in favour of the complainants.
We have heard the contesting parties and gone through the material available on the record; including the written submissions/ arguments, very carefully.
Admittedly, in the present case, the dispute is with regard to non transfer/conversion of the rights of dwelling unit No.536, Sector 33-B, Chandigarh (immovable property) from leasehold to freehold, in favour of the respondents-complainants by the appellants. Under above circumstances, the only short question which needs to be decided by this Commission is, as to whether, the case of the respondents-complainants alleging deficiency in service on the part of the opposite parties on the ground of non transfer/conversion of the unit in question in their favour, falls under the purview of consumer complaint under Consumer Protection Act or not? It is significant to mention here that a similar question fell for determination before the Hon'ble Supreme Court of India in Estate Officer vs Charanjit Kaur, Civil Appeal No. 4964 of 2021 (Arising out of SLP (Civil) No. 5051 of 2018) decided on 07.09.2021, wherein under similar circumstances, it has been categorically held that the Consumer Fora would not have jurisdiction to entertain the consumer complaints on the ground of deficiency in service related to transfer of title of the immovable property. Relevant part of the said judgment is reproduced hereunder:-
"....11. Still further, it was argued that the reliance on the judgment in M.K. Gupta was clearly erroneous inasmuch as that was a case wherein the allotment of flats was considered to be "service" within the meaning of Section 2(o) of the Consumer Protection Act, 1986. Some of the provisions from the Consumer Act as are relevant for the decision of the present case are as under:
(c) "complaint" means any allegation in writing made by a complainant that-
(i) xxx xxx xxx
(iii) the services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect;
(d) "consumer" means any person who- xxx xxx xxx
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose;
(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;
(o) "service" means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;
14. Finding of the District Forum.--(1) If, after the proceeding conducted under Section 13, the District Forum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to do one or more of the following things, namely:
(a) xxx xxxx
(e) to remove the defects in goods or deficiencies in the services in question;
(f) xxx xxxx
12. In M.K. Gupta, the question posed was as to the word "service" extends to the deficiency in construction of a house or flat. It was held that such construction was for the benefit of person for whom it was to be constructed. The allottee may do so himself or hire services of a builder or contractor. When a statutory authority develops land or allots a site or constructs a house for the benefit of common man, it is a statutory service. But if such service is provided by a builder or contractor, it would be a contractual service. The Court held as under:
"4. What is the meaning of the word 'service'? Does it extend to deficiency in the building of a house or flat? Can a complaint be filed under the Act against the statutory authority or a builder or contractor for any deficiency in respect of such property. The answer to all this shall depend on understanding of the word 'service'. The term has variety of meanings. It may mean any benefit or any act resulting in promoting interest or happiness. It may be contractual, professional, public, domestic, legal, statutory etc. The concept of service thus is very wide. How it should be understood and what it means depends on the context in which it has been used in an enactment. Clause ( o) of the definition section defines it as under:
"'service' means .........................."
It is in three parts. The main part is followed by inclusive clause and ends by exclusionary clause. The main clause itself is very wide. It applies to any service made available to potential users. The words 'any' and 'potential' are significant. Both are of wide amplitude. .......
6. Construction of a house or flat is for the benefit of person for whom it is constructed. He may do it himself or hire services of a builder or contractor. The latter being for consideration is service as defined in the Act. Similarly when a statutory authority develops land or allots a site or constructs a house for the benefit of common man it is as much service as by a builder or contractor. The one is contractual service and other statutory service. If the service is defective or it is not what was represented then it would be unfair trade practice as defined in the Act. Any defect in construction activity would be denial of comfort and service to a consumer. When possession of property is not delivered within stipulated period the delay so caused is denial of service. Such disputes or claims are not in respect of immoveable property as argued but deficiency in rendering of service of particular standard, quality or grade. Such deficiencies or omissions are defined in sub- clause (ii) of clause (r) of Section 2 as unfair trade practice. If a builder of a house uses substandard material in construction of a building or makes false or misleading representation about the condition of the house then it is denial of the facility or benefit of which a consumer is entitled to claim value under the Act. When the contractor or builder undertakes to erect a house or flat then it is inherent in it that he shall perform his obligation as agreed to. A flat with a leaking roof, or cracking wall or substandard floor is denial of service. Similarly when a statutory authority undertakes to develop land and frame housing scheme, it, while performing statutory duty renders service to the society in general and individual in particular. The entire approach of the learned counsel for the development authority in emphasising that power exercised under a statute could not be stretched to mean service proceeded on misconception. It is incorrect understanding of the statutory functions under a social legislation. A development authority while developing the land or framing a scheme for housing discharges statutory duty the purpose and objective of which is service to the citizens. As pointed out earlier the entire purpose of widening the definitions is to include in it not only day to day buying of goods by a common man but even such activities which are otherwise not commercial but professional or service-oriented in nature. The provisions in the Acts, namely, Lucknow Development Act, Delhi Development Act or Bangalore Development Act clearly provide for preparing plan, development of land, and framing of scheme etc. Therefore if such authority undertakes to construct building or allot houses or building sites to citizens of the State either as amenity or as benefit then it amounts to rendering of service and will be covered in the expression 'service made available to potential users'. A person who applies for allotment of a building site or for a flat constructed by the development authority or enters into an agreement with a builder or a contractor is a potential user and nature of transaction is covered in the expression 'service of any description'. It further indicates that the definition is not exhaustive. The inclusive clause succeeded in widening its scope but not exhausting the services which could be covered in earlier part. So any service except when it is free of charge or under a constraint of personal service is included in it. Since housing activity is a service it was covered in the clause as it stood before 1993."
13. The judgment in Ghaziabad Development Authority v. Balbir Singh was in the context of grant of interest at the rate of 18%. Such grant of interest was not interfered with. This Court approved the judgment in M.K. Gupta and held as under:
"We are in full agreement with what is observed herein. Thus the law is that the Consumer Protection Act has a wide reach and the Commission has jurisdiction even in cases of service rendered by statutory and public authorities. Such authorities become liable to compensate for misfeasance in public office i.e. an act which is oppressive or capricious or arbitrary or negligent provided loss or injury is suffered by a citizen. The word compensation is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss."
14. In Chandigarh Housing Board v. Avtar Singh and Ors. the Cooperative Housing Societies submitted an application for allotment of plots advertised by Chandigarh Housing Board. The Societies collected 10% of the tentative price from their members and deposited the same in a bank specified in the scheme. If any member was to seek refund, then 10% out of the 25% of the earnest money was to be deducted. The dispute before the High Court was in respect of the direction of 10% of the amount. This Court held as under:
"51. If the final order passed by the High Court is read in conjunction with the interim order dated 11-5-1992, it becomes clear that the Societies were to deposit the remaining amount with interest at the rate of 18% per annum only if they were to accept allotment of flats under the Scheme. Although, the writ petitions were filed by the Societies, the language of the interim order passed by the High Court shows that the learned Judges were thinking of imposing liability of 18% interest only on those members who were to accept allotment of flats to be constructed by the Societies. The members of the Societies did not get an opportunity to accept the allotment because even after deposit of full earnest money and 18% interest, the Board did not allot land to the Societies on which they could construct dwelling units/flats. The Finance Secretary misinterpreted the orders of the High Court and issued wholly arbitrary and unjust directive to the Board not to refund 18% interest to the members of the Societies who had applied for refund before allotment of land by the Board."
15. In fact, the precise issue as to whether the auction of sites under the 1973 Rules involves sale of goods or of rendering of service came up for consideration in UT Chandigarh Administration and Another v. Amarjeet Singh and Others. This Court considered the judgments of this Court in M.K. Gupta and Balbir Singh. One of the arguments raised was as under-
"When the auction of sites (for grant of a lease for 99 years) was in exercise of the power of the Government (the UT Chandigarh Administration) under the provisions of the Development Act in accordance with the Leasehold Rules, it involves neither sale of goods nor rendering of any service. The act of leasing plots by auction by the appellants therefore did not result in the successful bidder becoming a "consumer" or the appellants becoming "service providers". In the absence of hiring or availing of any service, the question of deficiency in service or unfair or restrictive trade practice with reference to a service, did not arise and the complaint under the Act was not maintainable."
16. In respect of the abovementioned question posed, it was held as under:
"21. With reference to a public auction of existing sites (as contrasted from sites to be "formed"), the purchaser/lessee is not a consumer, the owner is not a "trader" or "service provider" and the grievance does not relate to any matter in regard to which a complaint can be filed. Therefore, any grievance by the purchaser/lessee will not give rise to a complaint or consumer dispute and the fora under the Act will not have jurisdiction to entertain or decide any complaint by the auction-purchaser/lessee against the owner holding the auction of sites."
17. The second question was in respect of lack of amenities i.e., roads, water supply lines, drainage system, rainwater drainage and electricity etc. This Court held that since the sites were put to public auction, therefore, no grievance regarding amenities could be entertained as the bidder had the opportunity to verify the sites before participating in the auction.
18. In the present case, the allotment of residential sites on lease hold basis for 99 years is not in issue. It has not come on record as to whether such sites were allotted in an auction or by inviting applications. Even if the site had been allotted after inviting applications, the fact remains that the respondents claim conversion of such lease hold sites to free hold sites on payment of the charges which are fixed by the Administration. Such conversion was sought in view of the fact that as against the limited right in the lease property for 99 years, the Administration has decided to grant freehold rights on satisfaction of certain conditions mentioned in the 1996 Rules. The fact is that the respondents had paid the premium amount as fixed under the 1973 Rules. Now, the claim is for purchase of remaining rights of the Central Government to convert the site into freehold. The Central Government continues to be owner of the land until the entire consideration money together with interest or any other amount is paid to the Central Government on account of transfer of any site or building or both as provided in Section 3 of the Act. Therefore, the owner i.e., the Central Government, cannot be said to be a trader or a service provider. The appellant is not charging any fee for conversion of leasehold property into freehold property except the amount in accordance with the 1996 Rules, which is part of the sale consideration. It is thus a case of sale of immovable property on the terms as were fixed in the 1996 Rules. The amount so fixed under the Rules would form part of the sale consideration and not a fee or charge levied for providing any kind of service.
19. In terms of Section 14(e) of the Consumer Act, the District Forum can inter-alia direct removal of deficiency in the services. The deficiency in service however does not include the transfer of title in favour of the allottee who was earlier granted leasehold rights.
As noted above, appellant is not providing any services within the meaning of Section 2(o) of the Consumer Act. The expression 'service' includes housing construction and not allotment of a site or a plot.
20. The Consumer fora had taken into consideration a noting in the administrative file of the appellant. A noting is however a part of the decision-making process. Such noting does not fructify into an order unless the same is communicated to the affected person. The reference may be made to Bachhittar Singh v. State of Punjab, wherein this Court held as under:-
"9. The question, therefore, is whether he did in fact make such an order. Merely writing something on the file does not amount to an order. Before something amounts to an order of the State Government two things are necessary. The order has to be expressed in the name of the Governor as required by clause (1) of Article 166 and then it has to be communicated. As already indicated, no formal order modifying the decision of the Revenue Secretary was ever made. Until such an order is drawn up the State Government cannot, in our opinion, be regarded as bound by what was stated in the file. As long as the matter rested with him the Revenue Minister could well score out his remarks or minutes on the file and write fresh ones.
10. The business of State is a complicated one and has necessarily to be conducted through the agency of a large number of officials and authorities. The Constitution, therefore, requires and so did the Rules of Business framed by the Rajpramukh of PEPSU provide, that the action must be taken by the authority concerned in the name of the Rajpramukh. It is not till this formality is observed that the action can be regarded as that of the State or here, by the Rajpramukh. We may further observe that, constitutionally speaking, the Minister is no more than an adviser and that the head of the State, the Governor or Rajpramukh [ Till the abolition of that office by the Amendment of the Constitution in 1956.], is to act with the aid and advice of his Council of Ministers. Therefore, until such advice is accepted by the Governor whatever the Minister or the Council of Ministers may say in regard to a particular matter does not become the action of the State until the advice of the Council of Ministers is accepted or deemed to be accepted by the Head of the State. Indeed, it is possible that after expressing one opinion about a particular matter at a particular stage a Minister or the Council of Ministers may express quite a different opinion, one which may be completely opposed to the earlier opinion. Which of them can be regarded as the "order" of the State Government? Therefore, to make the opinion amount to a decision of the Government it must be communicated to the person concerned. In this connection we may quote the following from the judgment of this Court in the State of Punjab v. Sodhi Sukhdev Singh [AIR (1961) SC 493, 512] :
"Mr Gopal Singh attempted to argue that before the final order was passed the Council of Ministers had decided to accept the respondent's representation and to reinstate him, and that, according to him, the respondent seeks to prove by calling the two original orders. We are unable to understand this argument.
Even if the Council of Ministers had provisionally decided to reinstate the respondent that would not prevent the Council from reconsidering the matter and coming to a contrary conclusion later on, until a final decision is reached by them and is communicated to the Rajpramukh in the form of advice and acted upon by him by issuing an order in that behalf to the respondent." Thus it is of the essence that the order has to be communicated to the person who would be affected by that order before the State and that person can be bound by that order. For, until the order is communicated to the person affected by it, it would be open to the Council of Ministers to consider the matter over and over again and, therefore, till its communication the order cannot be regarded as anything more than provisional in character.
21. Therefore, the noting by itself cannot be pressed into service to return a finding of deficiency in service. However, the fact remains that in terms of 1996 Rules, an amount of Rs.1710/- per sq.mt. was fixed as conversion charges. The land rates were to be fixed by the Administration from time to time under Rule 5 of 1996 Rules. In Annexure-A, the land rate for conversion was fixed at Rs.1710/- per sq.mt. The same was to be applied for a period of one year. But as admitted at the Bar, the rates were revised only in 2017. The action of the appellant in rejecting the request for conversion is thus arbitrary and discriminatory. The request could not be kept pending when the statutory Rules were in force. The executive authority could not by an administrative order keep the matter pending, when there was no other reason not to accept the conversion except impending increase in the conversion charges.
22. It is the stand of the appellant that no conversion was allowed after a letter was issued on 10.05.2013. The Administration has however allowed conversion of leasehold properties into freehold even after the said letter dated 10.05.2013, as conversion of plots bearing file No. RPL 19565 and RPL 19601, was allowed on 04.12.2013 and 11.11.2013 respectively.
23. Mr. Goel has argued that there cannot be any negative equality as even if some sites have been converted in contravention of the decision communicated on 10.05.2013, it would not confer any enforceable right in favour of the allottees. Reference was made to Chandigarh Administration v. Jagjit Singh. We do not find any merit in the argument of Mr. Goel. On the date when the letter was issued by the administration on 10.05.2013, the statutory 1996 Rules were in force. Such Rules were kept in abeyance on the basis of communication on behalf of the Finance Secretary to the Estate Officer. Such communication cannot be countenanced. The statutory rules could not be put to hold because the issue of revision of rates of conversion was under consideration of the Administration. Even after the said letter the rates were fixed only in 2017. In the face of valid statutory Rules, an administrative decision cannot be sustained.
24. Since the respondents are already in possession of the sites as lessee on 99 years basis, it cannot be said that the appellant was deficient in providing any service, which even if used in a liberal sense would not include transfer of title in an immovable property. Thus, the consumer fora under the Act would not have jurisdiction to entertain the consumer complaints on the ground of deficiency in service related to transfer of title of the immovable property. ......"
In view of principle of law laid down by the Hon'ble Supreme Court of India in Estate Officer vs Charanjit Kaur case (supra), wherein, in para no.24 it has been specifically held that the Consumer Fora under the Act would not have jurisdiction to entertain the consumer complaints on the ground of deficiency in service related to transfer of title of the immovable property i.e. conversion of lease hold sites to free hold sites, resultantly, we are of the considered view that the District Commission lacks jurisdiction to give directions to the appellants/opposite parties to transfer/convert the rights of dwelling unit No.536, Sector 33-B, Chandigarh (immovable property) from leasehold to freehold, in favour of the complainants. In this view of the matter, the impugned order is liable to be set aside.
Consequently, this appeal stands allowed and the impugned order stands set aside. Resultantly, miscellaneous application bearing no.483 of 2020 (for stay of impugned order) and 875 of 2021 (for adjournment of the case to sine die) stand dismissed with no order as to cost.
The complaint alongwith documents annexed therewith be returned to the complainants-respondents, with liberty to get their grievances redressed through alternative remedy, permissible to them under law.
Certified copies of this order be sent to the parties, free of charge.
The concerned file be consigned to Record Room, after completion.
Pronounced 02.06.2022 Sd/-
[JUSTICE RAJ SHEKHAR ATTRI] PRESIDENT Sd/-
(RAJESH K. ARYA) MEMBER Rg.