Dr. Inder Jit Singh, Presiding Member
1. The present Revision Petition (RP) has been filed by the Petitioner against Respondents as detailed above, under section 21(b) of Consumer Protection Act 1986, against the order dated 07.09.2017 of the State Consumer Disputes Redressal Commission, Lucknow, U.P., (hereinafter referred to as the ‘State Commission’), in First Appeal (FA) No.327 of 2012 in which order dated 03.10.2011 of District Consumer Disputes Redressal Forum-II, Agra (hereinafter referred to as District Forum) in Consumer Complaint (CC) no188/2010 was challenged, inter alia praying to allow the revision petition and set aside the order passed by State Commission.
2. While the Revision Petitioner (hereinafter also referred to as complainant) was Respondent and the Respondent(s) (hereinafter also referred to as OPs) were Appellants in the said FA/327/2012 before the State Commission, the Revision Petitioner was complainant and Respondent(s) were OPs before the District Forum in the CC no188/2010.
3. Notice was issued to the Respondent(s) on 05.06.2018. Parties filed Written Arguments/Synopsis on 22.11.2021 (petitioner/Complainant) and 23.11.2021 (Respondents/OPs) respectively.
4. Brief facts of the case, as emerged from the RP, Order of the State Commission, Order of the District Forum and other case records are that:-
The complainant initially deposited Rs.1000/- with the appellant Housing Development Board on 15.02.1988 for the registration of an Economical Weaker Section Flat. However, despite this deposit, the said flat was not allotted to him. Subsequently, the complainant was advised to change his registration to the Lower Income Group category. To effect this change, he deposited Rs. 4000/- for registration on 20.01.1992, along with an additional Rs. 750/- as a change fee. Despite these efforts, on 20.06.1992, the complainant further deposited Rs. 6000/-, but regrettably, no flat was allocated to him. Faced with this situation, the complainant felt compelled to file the aforementioned complaint.
5. Vide Order dated 03.10.2011, in the CC no. 188/2010 the District Forum has allowed the complaint and directed OPs to allot a LIG flat to the complainant on the rates of 1993, as per rules.
6. Aggrieved by the said Order dated 03.10.2011 of District Forum, Respondent(s) appealed in State Commission and the State Commission vide order dated 07.09.2017 in FA No.327/2012 has dismissed the complaint and allowed the appeal.
7. Petitioner has challenged the said Order dated 07.09.2017 of the State Commission mainly on following grounds:
i. The petitioner/complainant paid the registration fees for an LIG Category house, and the OPs’/respondents' contradictory claims regarding the registration fees and enhanced payment are baseless and lack evidence. The State Commission incorrectly concluded that the complainant doesn't fit the definition of a consumer under the Consumer Protection Act, 1986. According to various Supreme Court judgments, an individual who has applied for registration with a development authority and is awaiting allotment qualifies as a consumer under the Consumer Protection Act, 1986. The State Commission disregarded the legal precedent set by the Hon'ble Supreme Court in Lucknow Development Authority v. M.K. Gupta, AIR 1994 SC 787.
ii. The District Forum carefully considered the evidence before accepting the complainant's complaint, aligning with the legal judgments of the Supreme Court and National Commission. It's crucial to note that the complainant submitted an application for house allotment, which was duly accepted by the OPs, and the complainant awaited the house allotment. If the complainant's application was to be rejected, it should have been done within a reasonable time. The OP authority cannot accept the application fee and then argue that they are not obligated to allot any houses. In the case of Delhi Development Authority vs. Parveen Kumar & Ors, the Hon'ble National Commission established that a person allotted a flat or registered with a statutory authority for flat/plots, awaiting allotment, qualifies as a "consumer" under the Consumer Protection Act, 1986. However, if the flat/plot is sold through public auction without an obligation for further development, the purchaser is not considered a "consumer" under the Act. The Hon'ble State Commission incorrectly concluded that merely making the registration payment doesn't bring the petitioner under the consumer definition. This inference contradicts the Supreme Court's ruling in Lucknow Development Authority (Supra).
iii. Failure to set aside the State Commission's order would set an erroneous precedent. If upheld, government authorities could indefinitely delay house allotments, leaving registrants in a perpetual state of waiting. The complainant, despite waiting for many years, would be left with nothing. The State Commission completely disregarded the provision 16(2) of the UP Housing Board Regulation, which mandates house allotments on a first-come, first-served basis. This critical provision was inexplicably overlooked by the State Commission.
iv. Despite the OP authorities denying receipt of registration money from the complainant, they failed to produce any account statement supporting their claim. This omission strongly suggests that the OPs did, in fact, accept the registration money. The complainant has clearly demonstrated that the OPs engaged in unfair trade practices and provided deficient services. Initially, they failed to deliver any house in the EWS Category and suggested that the complainant convert his application to the LIG Category. Subsequently, the OPs did not provide any house in the LIG category despite numerous reminders. They neither cancelled the complainant's registration nor refunded the money, constituting a clear case of service deficiency on the part of the OPs.
8. Heard counsels of both sides. Contentions/pleas of the parties, on various issues raised in the RP, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.
8.1. The counsel for the Petitioner/complainant argued that the complainant qualifies as a consumer under Section 2(1)(d) of the Consumer Protection Act, 1986, which defines a consumer as follows:
A consumer is any person who:
(i) Purchases goods for a consideration that has been paid or promised, either fully or partially, or under any deferred payment system. This also includes users of such goods, provided they have the approval of the purchaser. However, it does not include individuals who acquire such goods for resale or commercial purposes; or
(ii) Hires or avails of services for a consideration that has been paid or promised, either fully or partially, or under any deferred payment system. This definition includes beneficiaries of such services, except for those who hire or avail of the services for a consideration paid or promised, either fully or partially, or under any deferred payment system, and with the approval of the first-mentioned person. It does not cover individuals who avail of such services for commercial purposes.
8.2. The complainant initially applied for the allotment of a house in the EWS category, which was subsequently shifted to the LIG category at the request of the OPs. The complainant paid both registration charges and conversion charges through a draft to the OPs. It is important to note that the OPs accepted the payment of registration charges. Therefore, the complainant qualifies as a consumer, and the burden of proving otherwise falls upon the OPs. The complainant paid a registration fee of Rs. 1,000/- on 15.02.1988. Following the OP's recommendation and direction, the complainant paid Rs. 4,000/- on 20.01.1992. Additionally, the complainant paid Rs. 750/- as conversion charges for transferring from the EWS category to the LIG category.
8.3 As per the Sikandra Yojana declared by the OP in a letter dated 09.07.1994, the complainant was entitled to the allotment of a house at 1993 rates in the LIG category. According to provision 16(2) of the U.P. Housing Board Regulation, houses should be allotted on a first-come, first-served basis. However, the OPs did not adhere to this provision. The cause of action arose when the OPs verbally directed the complainant to transfer his allotment from the EWS category to the LIG category. It further arose when the complainant wrote letters on various dates and sent a legal notice to the OPs. The cause of action continues as the possession of the house has not yet been delivered to the complainant.
8.4 The counsel further argued that the OPs have committed deficiency in service by making the complainant wait for an indefinite period. The delay in delivering possession is considered a denial of service, and the complainant seeks compensation. The complainant has waited for an indefinite period for possession, causing mental harassment. The OPs have failed to deliver possession promptly, leading to suffering on the complainant's part.
8.5 The counsel for complainant/petitioner relied on following judgments:-
a. Delhi Development Authority vs Shri Parveen Kumar & Ors. RP/3649/2014 (NCDRC) pronounced on 29.01.2015
“11.The legal proposition which emerges from the above rendered decisions of the Hon’ble Supreme Court is that a person, who is allotted a flat or a plot to be developed by a statutory authority such as Delhi Development Authority or Avas Vikas Parishad as well as a person, who is registered with such an Authority for the purpose of allotment of such a flat/plot and is awaiting allotment would be a ‘consumer’ within the meaning of Section2 (1) (d) of the Consumer Protection Act, 1986…….”
b. Lucknow Development Authority v. M.K. Gupta, (1994) 1 SCC 243
“The Hon’ble Supreme Court held that when the possession of the property is not delivered within the stipulated time, the delay so caused is denial of service and the consumer who is the victim of such delay is entitled for compensation”
c. Paramvir Singh vs. P.H. House Pvt. Ltd. RP/2779/2010 NCDRC pronounced on 11.05.2011
“The consumer cannot be made to wait indefinitely at the whims and fancies of the builder especially when false representations have been made by the OP regarding completion…..”
8.6 The counsel for OPs/respondents argued that there has been no deficiency in service by the OPs. There is a prescribed procedure for allotment of plots/houses as per the rules and terms and conditions of the Board, which cannot be changed under any circumstances. The District Forum has exceeded its jurisdiction by deciding the complaint in favor of the complainant and granting relief. The Forum did not consider that the complainant had only deposited the registration amount and the house had not been allotted. Therefore, the complainant is not a consumer, and the complaint should have been rejected.
8.7. The complainant is a prospective investor and not a consumer until the allotment. Mere application for allotment does not grant any right to the complainant. The District Forum wrongly exercised its jurisdiction by altering the terms and conditions of allotment. Under Rule-15 of Regulation 1979, the Housing Board is not obligated to allot property to every person, and the District Forum wrongly directed the OP to allot an L.I.G. house to the complainant.The complainant did not deposit the enhanced registration amount in the Board's account. The direction to allot an L.I.G. house at the 1993 rate is illegal, arbitrary, without jurisdiction, and against the Rules and Regulations of the Parishad. The complaint was wrongly allowed in favour of the complainant without considering the facts stated in the OPs' written statement filed before the District Forum.
8.8 The District Forum ignored the documentary evidence presented by the OPs, and the complainant cannot become a consumer of the Housing Development Board by depositing only the registration amount. Section 15 of the Housing Development Board Regulation 1997 states that the Housing Development Board is not bound to allot plots or flats to every applicant. Therefore, no deficiency in service has occurred, and the District Forum's order, which ignored the Board's rules, should be set aside.
9. While allowing the Appeal of respondents herein, State Commission has observed as follows:
“From the perusal of file it is clear that the learned District Forum has ignored the documentary evidences produced by the appellant. The important fact is that respondent/complainant has deposited only the registration amount and applicant cannot become the consumer of Housing Development Board by depositing only the registration amount. Therefore, as he is not the consumer, no contract arose between both the parties. Besides above, the right to decide the value of flat/plot is with the Housing Development Board. It is also correct that as per section 15 of the Housing Development Board Regulation, 1979, the Housing Development Board is not bound to allot the Plot or flat to any applicant. In this manner, no deficiency in service has been committed at the level of appellant. Learned District Forum has ignored the facts and passed the order by ignoring the rules Housing Development Board, which is liable to be set-aside. Respondent is entitled to get the refund of his registration amount alongwith interest at the rate of 06 percent. Therefore, if he wants to take any flat or plot, he can get himself registered afresh on present rates and is free to get allotted the flat as per rules. In view of above discussion, impugned order dated 03.10.2011 is liable to be set-aside and appeal deserves to be allowed.”
10. A bare perusal of above observation shows that State Commission has given such sweeping observations without any basis. Nowhere in its order it has stated as to which evidences produced by appellant (respondents herein) have been ignored by the District Forum. We do not agree with the observations of the State Commission that Complainant is not a Consumer because he has only deposited the registration amount. When a public authority like the respondent in the present case notifies any rules or scheme for allotment of plots or flats or houses to public and receives any registration amount towards such registration in accordance with the terms & conditions of such Scheme/Rules, notwithstanding that every applicant does not get any inherent right to get any such flat or plot or house for which he has made an application and deposited the required fee/registration amount, but that gives a right to all such applicants to get their applications considered strictly as per the notified rules/terms & conditions of such scheme, and if found eligible, to get such a plot/flat/house allotted subject to fulfilment of laid down conditions and deposit of prescribed price/fees etc. Public Authority cannot reject any such application on its whims and fancies just by stating that it is not bound to allot a flat or plot to any applicant. Such a rejection has to be based on valid reasons/grounds, which have to be duly conveyed to such applicants in writing and failure to do so amounts to deficiency in service, as all such applicants who apply in pursuance of a duly notified scheme/laid down rules and deposit the required registration fee are definitely the consumers of such public authority. No doubt when the number of applicants, including the eligible applicants, who have deposited the required registration fee etc. is more than the number of plots/flats/houses etc. available under any such scheme, the public authority in such circumstances have to adopt a transparent and fair method/procedure as per the laid down criteria (which in many cases is even a lottery system held in public in a transparent manner before duly appointed judges/monitors) to select amongst the eligible applicants numbers equal to available units. Public authority cannot resort to opaque or discretionary methods to choose some such applicants and reject others. Hence, if the complainant/petitioner in the instant case, who qualifies to be a consumer of the OP/respondent, has applied in pursuance of a well notified scheme or Rule of respondent and has deposited the required registration amount, he has a right to get his application considered strictly as per the provisions of such rule/terms & conditions of scheme and if found eligible, to get the flat allotted subject to payments as per scheme and fulfilment of requisite formalities. State Commission has not elaborated in its order as to which rules of respondent have been ignored by the District Forum and in what manner. State Commission has not given any reasons as to why the respondent (Petitioner herein) is entitled to refund of his registration amount with 6% interest and not the flat. Further, observation of State Commission that if Petitioner herein wants a flat or plot, he can get himself registered a fresh on present rates and is free to get allotted the flat as per rules is without any basis. If Complainant has made a valid application for allotment as early as in 1988 under a duly notified Scheme/Rule and got it converted under another Scheme (from EWS to LIG) in 1992, and paid the requisite registration amount and conversion fee etc., he definitely has a right to get such flat at the rates prevalent at the time when such scheme was notified/conversion was made unless the respondents establish beyond reasonable doubt that application of complainant was rejected at the appropriate time on valid reasons as the applicant failed to deposit the required amounts/fee as demanded/payable under the scheme or failed to comply with any laid down mandatory requirements, which is not the situation in the present case. State Commission’s order is not a speaking order and cannot be sustained. State Commission has observed in its order that it is admitted by the appellant (respondent herein) that complainant had deposited Rs.1000/- on 15.02.1988 as registration charges for the allotment of Economically Weaker Section (EWS) flat, it has also been admitted that on 10.02.1992 appellant had given the bank draft of Rs.4000/- and Rs.750/- for change of registration from EWS to Lower Income Group (LIG) category flat. As both drafts required revalidation, the complainant again sent a bank draft of Rs.6000/- to the respondents on 20.06.1992.
11. Before the District Forum, complainant in support of his case has submitted his affidavit, application for change of flat, letter dated 09.06.1993 and 20.06.1992 letter dated 20.01.1992, requesting for change of flat, photocopy of the draft of Rs.4000/-, challan of Rs.1000/- and legal notice dated 09.08.2010. District Forum on finding the complainant was registered with OP, registered with OP, found the OPs deficient in service. After considering the evidence placed before it, District allowed the complaint, directed the OPs/Defendants to allot LIG flat at the 1993 rates as per rules. OPs in their written version before District Forum have admitted that both the drafts were submitted by the complainant and sent by the office to Lucknow office, but amount of said drafts were not deposited in the account of Board. If the OPs admit having received the two drafts from complained by their field office, their plea that said drafts were not deposited into their account cannot be accepted. Even if it has not been deposited into the account of OPs, fault for the same lies with the OPs and/or its officials only and not with the complainant. Hence, complainant cannot be blamed or made to suffer for the fault of the OPs/its officials.
12. We have carefully gone through the orders of the State Commission, District Forum, other relevant records, in particular various documents/evidences produced by the complainant before the District Forum as detailed in the preceding paras, and are of the view that District Forum after due appreciation of evidence adduced before it, has given a well-reasoned order but the State Commission erred in setting aside the same. The order of the State Commission suffers from a material irregularity and cannot be sustained. Hence, the same is hereby set aside and order of the District Forum is restored with the directions that Respondents herein shall issue an allotment letter, within 45 days of this order, of a LIG flat, as was registered in 1992, either in the same Scheme/at the same location for which it was applied in 1992 or a similar size/category in a similar/nearby location, at the price applicable in 1993 as ordered by the District Forum. Respondents while issuing the allotment letter, will state the total amount payable towards the cost of such LIG flat (as per 1993 rules) and give a minimum of 45 days’ time to the complainant to deposit such amount. This is further subject to the condition that Respondents shall be entitled to charge simple interest @ 6% p.a. on the total cost so indicated in the allotment letter as per 1993 rates from the date of registration till the date of actual payment and complainant shall be bound to pay such cost of LIG flat at 1993 rates along with interest @6% per annum w.e.f. date of registration (change from EWS to LIG) in 1992. Respondent shall send the allotment letter to the Petitioner herein through Registered A.D. Post and also deliver a copy in person if the complainant so desires to receive by visiting the office of Respondent, in addition to sending a signed copy on the notified email of the complaint.
13. Revision Petition is disposed of accordingly with a litigation cost of Rs.10,000/- to the Petitioner herein (including the cost of Rs.2,000/- awarded by the District Forum. This amount will be set off by the Respondents from the amount payable by the Complainant towards costs of flat/interest @6% p.a. as per this order and Respondents while issuing allotment letter will adjust this amount accordingly.
14. The pending IAs in the case, if any, also stand disposed off.
