JAY PRAKASH AGARWAL vs LIFE INSURANCE CORPORATION OF INDIA

Shri Jay Prakash Aggarwal has filed the instant consumer complaint under section 21 (A) of the Consumer Protection Act, 1986 alleging that sometimes in May 2002 he came across a proposal of the opposite party for sale of ready flats. Complainant being attracted by the scheme applied for a flat by paying the registration fee of Rs.2.00 lakh on 18.05.2012. Complainant was given to understand that the allotment of flats would be decided by draw of lots on behalf of the applicants. Three months later, on 20.08.2012 the complainant received a communication from the opposite party captioned as ''letter of allotment'' dated 14.08.2012. Vide said letter the complainant was informed that he has been allotted one flat and was required to pay the first instalment within 45 days of receipt of the letter. The said letter was received on 20.08.2012. The complainant vide communication dated 28.09.2012 requested the opposite party to convert the allotment in the name of a Private Limited Company of which the complainant was the Director. When no communication was received, the complainant wrote another letter dated 18.10.2012 but the opposite party failed to respond. It is alleged that on 05.11.2012 the complainant paid a sum of Rs.10.00 lakh to the opposite party against the first instalment. On 16.07.2013, the complainant received a letter dated 09.07.2012 calling upon the complainant to pay the second instalment with interest by 31.07.2013. It was clarified in the said letter that in the event of failure to pay the second instalment the allotment would be stand cancelled and registration fee would be forfeited.

Complainant being aggrieved of the stand taken by the opposite party sent a lawyers notice on 30.07.2013 which was not responded to and ultimately the complainant received another letter

dated 21.11.2013 cancelling the allotment in favour of the complainant. The letter stated that registration fee of Rs.2.00 lakh has been forfeited and besides Rs.1,50,000/- shall be deducted from the first instalment paid by the complainant. Being aggrieved of the said cancellation and forfeiture of the amount, the complainant has filed the instant complaint with the following prayer: "It is, therefore, most respectfully prayed that this Hon''ble Court may be pleased to: Allow the present complaint;

This Hon''ble Court may be pleased to direct the respondent to allot a flat in the name of the complainant''s company as the complainant''s name came duly in the draw of lots;

In the alternative direct the respondent to compensate the complainant and pay the market price of the flat allotted to him which is more than Rs.50 lakhs at this time;

Direct the respondent to pay Rs.1,50,000/- towards the cost of the litigation to the complainant; and

Pass such other or further order / orders as may be deemed fit and proper on the facts and in the circumstances of this case".

We have heard the learned counsel for the complainant on admission of the complaint. Learned counsel for the complainant has contended that the opposite party has committed deficiency of service in refusing to convert the allotment in favour of the Private Limited Company, of which the complainant is the Director and it has also committed deficiency of service by cancelling the allotment without deciding the request for transferring the allotment.

On the face of it as per the allotment letter and the supporting documents, the complainant is not a consumer as defined under section 2 (i) (d) of the Consumer Protect Act, 1986. The relevant provision is reproduced as under:

Section 2 (1) (d) of the Act defines the term "Consumer" as under:

(i) buys any goods 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 user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(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] ;

{ Explanation - For the purposes of this clause, "Commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment}.

On reading of the above, it is clear that a consumer means that any person who buys any goods for consideration or hires or avails of any services for consideration. In the instant case, admittedly, the opposite party offered to sell the ready flats without there being an element of service or promise by the opposite party. As no service was offered/ rendered by the opposite party, pursuant to the agreement between the parties the complainant cannot be termed as a consumer as envisaged under Section 2 (1) (d) of the Consumer Protection Act, 1986. Therefore, the complainant is not entitled to maintain a consumer complaint.

Further, the complainant has placed on record the letter of allotment dated 14.08.2012. The relevant extract from the said letter is reproduced as under: "We are happy to inform you that as per your 1 preference, flat no. D - 6 (6 Floor) st th has been allotted to you.

This allotment is however, subject to the terms and conditions set out in the brochure issued by the Life Insurance Corporation of India for the above Policy Holders Housing Scheme and as per the terms and conditions set out hereunder:

It is understood that at the time of making the aforesaid application for allotment of a flat in the Policy Holders'' Housing Scheme at M - 492, 5, Bramah Bandhab Upadhyay Sarani, New Alipur, Kolkata 700 053, you have carefully read the contents of the brochure issued for the purpose and have been fully satisfied as to the title of the life insurance corporation of India in respect of the said property and the floor plans, specifications, lay-outs of the, construction and materials used therefore, and no disputes or complaints regarding the same whatsoever shall be raised in future.

The price payable by you for the said flat allotted to you is Rs.1,26,98,356/- (Rupees one hundred twenty six lakh ninety eight thousand three hundred fifty six only). After taking into account the registration fees of Rs.2,00,000/- (Rs. Two lakh) remitted by you along with your application, the balance payable by you towards the sale price is Rs.1,24,98,356/- (Rupees One hundred twenty four lakh ninety eight thousand three hundred fifty six only). Now, you have to deposit the 1 instalment amounting to Rs.38.10 st lakh and service tax amounting to Rs.1,17,729/- (Service tax @ 12.6% of 25% of Rs.38.10 lakh, i.e., Rs.1,17,729/-_ within 45 days from the date of this allotment letter along with consent/ acceptance of the terms and conditions offered by LIC of India. NEFT for service tax shall be made separately".

On reading of the above, it is clear that vide letter dated 14.08.2012 no unconditional allotment of flat was given to the complainant and actually the allotment was subject to the terms and conditions of the brochure issued by the opposite party. The letter specifically provided that the allotment was subject to payment of Rs.38.10 lakh with service tax amounting to Rs.1,17,729/- within 45 days of the receipt of the allotment letter along with the consent/ acceptance of the terms and conditions offered by the opposite party. On-going through the

allegations in the complaint, admittedly the first instalment of Rs.38.10 lakh with service tax has not been paid. Neither is there any evidence that the complainant has sent his consent/ acceptance to the terms and conditions of allotment. Instead of sending his acceptance the complainant kept on sending letters to the opposite party to transfer the allotment in favour of his Private Limited Company.

The complainant has also placed on record the copy of the brochure on the basis of which he has applied for allotment. Clause 6 and 10 (b) of the terms and conditions detailed in brochure are relevant which are re-produced as under:

Eligibility:

Individual policy holders who are major (by age) Indian Nationals (including NRIs) holding at least one in-force life insurance policy of sum assured not less than Rs.3 lakh issued by LIC of India are eligible to apply for advance registration. Application can also be made in joint names of husband and wife or parent and child provided policies as above are held by both or in joint names. Institutions/corporate bodies will be considered for registration if flats are available after registering/allotting to eligible policy holder. NRIs fulfilling these conditions are also eligible to apply. LIC reserves the right of decision with regard to eligibility at its sole discretion .

Procedure for allotment of flats (if is oversubscribed):

(b) Once allotment is decided upon, it cannot be transferred to or exchanged with another applicant."

Clause 10 (b) clearly states that once the allotment is made it cannot be transferred to any other applicant. That being the condition of allotment, the request of transfer of allotment in the name of Private Limited Company could not be allowed. Further, clause 6 provides eligibility. It is also clear that the flats were offered for sale to individual LIC Policy Holders holding at least one in-force Life Insurance Policy of sum assured not less than Rs.3.00 lakh issued by LIC of India. Institutions/ corporate bodies are to be considered for registration if flats are available after registering/ allotting to eligible policy holders. Under this clause also, transfer of flat from the name of the complainant to a Private Limited Company was not feasible. Contrary to his allegation these clauses were brought to the notice of the complainant for not agreeing to the request for transfer as it is evident from the copy of the letter dated 21.11.2013 placed on record by the complainant.

In view of the above, discussion, the complaint is mis-founded and not maintainable, it is accordingly, rejected.