STATE vs Ceo -Cum -Secretary

BRIEF facts are that Petitioners/Complainants filed a complaint under Section 12 of the Consumer Protection Act, 1986 (for short ''Act'') against Respondent/Opposite Party alleging that they had given a bid for allotment of shop No. 5, HIMUDA Complex Housing Phase I & II, Baddi, District Solan, H.P. on lease basis for Rs. 34,80,000 and deposited Rs. 3,56,000 as 10% of the bid amount. Respondent confirmed the bid vide its letter dated 14.3.2008. Thereafter petitioners deposited 15% amount of the bid amount. At the time of auction, Mr. Sood, the Chief Engineer of respondent''s authority had assured the petitioners that possession of shop in question would be handed over after development of the complex within few months. After the auction, respondent issued schedule of payment to the petitioners and imposed interest @ 12% per annum on the installments w.e.f. 13.3.2008, whereas the complex was not completely developed by that time. Thereafter, respondent vide letter dated 26.7.2008, offered to hand over the possession of the shop in question to the petitioners. The petitioners accepted symbolic possession of the shop on 12.8.2008 under protest as there were several deficiencies in completion of the complex. Petitioners also pointed out the deficiency in black and white to the respondent. However, actual physical possession remained with the respondent. Petitioners vide reminder dated 23.8.2008, again requested the respondent to fulfill the deficiencies as already pointed out vide letter dated 12.8.2008. Respondent vide letter dated 22.4.2009, admitted the deficiencies. Petitioners again vide letter dated 25.5.2009 appraised the respondent that certain deficiencies such as development of the complex, pavement and parking for vehicle, essential amenities, electricity transformer and water supply were not provided in the complex. The lease deed of the shop in question, as per direction of the respondent was also registered in the office of Sub -Registrar, Nalagarh. Since, the actual physical possession of the shop in question was not handed over to the petitioners, therefore, respondent was not entitled to charge interest on the installments w.e.f. 13.3.2008. The petitioners also could not carry out business activities in the shop in question due to the aforementioned deficiencies. Hence, respondent is liable to pay damages/compensation to the petitioners. Accordingly, petitioners prayed that respondent be directed to pay them compensation of Rs. 4,50,000 in addition to Rs. 2 lakh for having suffered loss due to idleness of their hard earned money and Rs. 25,000 as litigation expenses and further respondent be also directed to withdraw the letter for handing over possession of the shop in question and issue fresh letter to hand over possession after fully developing the shop and the complex. Lastly, respondent be stopped from charging interest w.e.f. 13.4.2008 till full development of the complex.

RESPONDENT in its reply refuted the case of the petitioners and stated that petitioners took on lease the shop in question in a public auction for Rs. 34,80,000 on 26.2.2008. Further, it was alleged, that the Chief Engineer never gave assurance to the petitioners that possession of the shop in question would be handed over after development of the complex. It was further stated that in the advertisement of the public auction, it was specifically mentioned that the auction shall be on, "As is where is basis". The petitioners were asked to deposit the price money in 3 installments with interest @ 12 % per annum as per terms and condition of the lease. Thereafter, respondent issued allotment letter dated 30.6.2008. It was specifically denied that the complex was not developed. It was also denied that actual physical possession of the shop in question was not handed over to the petitioners. Respondent further alleged that in the letter of handing over possession it was stated by the petitioners that possession was accepted by them under protest, due to certain deficiencies revealed in the developments and completion for which separate letter was being issued. The defects pointed out by the petitioners, had been rectified by the Asstt. Engineer, Baddi and to that effect petitioners were informed, vide letter dated 22.4.2009. As per terms and conditions contained in the brochure, it was specifically provided that water and electricity connection has to be arranged by the lessees at their own level and at their own expenses directly from the concerned department. It was also alleged that as per information received from the office of HPSEB, the lessees never applied for electricity connection. The carpeting work in the premises has not been done as the external electrification work has not been completed. The toilets in the complex will be made functional by providing water supply, which is to be provided by the lessees. It was further stated that the matter pertaining to installation of electrical transformer was being taken up with the Department of HPSEB since October, 2007 and was being persuaded with the said Department. In nut -shell, respondent refuted the entire claim of the petitioners and prayed for dismissal of the complaint with costs. District Consumer Disputes Redressal Forum, Solan, Himachal Pradesh (for short, "District Forum") vide order dated 18.2.2011, found no merit in the complaint of the petitioners. Accordingly, it dismissed the same.

BEING aggrieved, petitioners filed (First Appeal No. 121/2011) before Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla (short, "State Commission").

THE State Commission, vide impugned order dated 16.6.2012 allowed the complaint of the petitioners and set aside the order of District Forum and directed the respondent as under; (a) to pay Rs. 50,000 as compensation for three years delay already caused in providing the amenities of making toilets functional, electrification of the parking and the complex area and keeping the lift pit open rendering it hazardous to use the shop in question;

(b) to pay the aforesaid amount of compensation, with interest @ 9% per annum from the date of this order, in case the aforesaid amount of money is not paid within one month from today;

(c) to provide the aforesaid amenities, within three months, failing which it shall pay damages @ 200 per day from the date immediately following the expiry of three months'' time given to it providing the aforesaid amenities and

(d) to pay Rs. 10,000 on account of litigation expenses."

Petitioners not satisfied with the order of the State Commission, filed (RP No. 3275 of 2012) before this Commission, stating that the relief granted is so meagre and sought the following reliefs: 1. That the complainants have invested up till now about Rs. 32,00,000 out of their retirement benefits and the whole investment is idle, and without any fruit and these complainants are also almost dead in the absence of any relief. It is, therefore, submitted that interest as @ Himuda is charging w.e.f. the date they have paid till the date of development may be given.

That a compensation of Rs. 4,50,000 in the complaint for harassment, mental and physical agony may kindly be granted.

That penalty of Rs. 200 per day is very meagre as the complex is huge one costing more than many Arabs and only the complainants are paying more Rs. 4 lacs per annum. Therefore, this penalty may be enhanced to Rs. 3,000 per day and payable to the complainants.

Litigation expenses claimed as Rs. 25,000 in the complaint may kindly be enhanced now the complainants have been made to plead their case before the State Commission and the National Commission.

That no interest be charged on these instalments till development is made.

Fresh possession letter may be issued after completion of the developments.

THERE are about 80 shops and none is working due to no developments in the complex and the open area i.e. parking, toilets, varandas etc. 7. On the other hand, respondent also being aggrieved has filed (Revision Petition No. 3883 of 2012) for setting aside the impugned order passed by the State Commission.

HENCE , both these petitions are being disposed of by this common order. Shri J.K. Sahni, petitioner No. 1 has appeared in person and also being authorized representatives of petitioner Nos. 2 and 3 has argued on behalf of the petitioners. On behalf of Himachal Urban Development Authority, Mr. Y. Prabhakar Rao, Advocate has appeared and argued the case.

WE have gone through the record and have considered the arguments advanced before us.

IN both these petitions, applications seeking condonation of delay of 3 -4 days have been filed. For the reasons mentioned in the applications, delay stands condoned. It has been contended by the petitioner that respondent vide their letter dated 12.8.2008, had assured them of providing certain amenities which were lacking before the handing over of the possession. However, some of the amenities were provided while respondent was taking steps for providing the remaining amenities. Under these circumstances, decision of U.T. Chandigarh Administration and Another v. Amarjeet Singh & Ors., : II (2009) SLT 736 : II (2009) CPJ 1 (SC) : 2009 CTJ 486 (SC) (CP), relied upon by the District Forum is not applicable to the facts of the present case at all.

IT is also contended that though as per terms and conditions of the auction the shop was auctioned "as is where is basis", but as per Clause 23 of the terms and conditions, basic services like roads, water supply, sewerage, electricity etc. in the complex were to be provided by the respondent. The explanation offered by respondent in its letter for not providing light in the commercial complex and parking place is that, the State Electricity Board did not install the transformers from which lighting arrangement is to be made and those transformers have not been provided so far. Thus, deficiency on the part of the respondent is writ large in this case.

ON the other hand, it has been argued by learned Counsel for the respondent that shop in question was put to auction on "as is where is basis". Therefore, petitioners are not "Consumer" as per the Act and decision of Amerjeet Singh (supra), is fully applicable to the facts of the present case. State Commission in its impugned order observed: 5. View taken by the learned Forum below that appellants are not covered by definition of "consumer" in view of the law laid down by the Hon''ble Supreme Court in U.T. Chandigarh Administration and Another v. Amarjeet Singh and Others, : 2009 (2) Consumer Protection Cases 6(supra), is not correct. It is true that the Hon''ble Supreme Court has held that purchaser at public auction in certain cases are not ''"consumers", but that is not an absolute declaration of law in para -14 of the said report, where the view with respect to this aspect of the matter has been expressed, it has been held that where there is a public auction, without assuring any specific or particular amenities, the prospective purchaser/lessee, participates in the auction after having had an opportunity of examining the site and the bid in auction is made, keeping in view the existing situation, position and condition of the site such a purchaser/lessee is not a "consumer." It has further been observed that if the amenities are available, he would offer a higher amount and if no amenities are available or the site suffers from any disadvantages, he would offer a lesser amount or may not even participate in the auction.

6, In the present case, there was an assurance of providing certain amenities to which, reference is made, by the appellants in their letter dated 12.8.2008 copy Annexure -G. We have observed that there was an assurance of the amenities mentioned in the said letter, because the respondent while replying the said letter, vide Annexure -L (dated 22.4.2009) and also in their reply to the complaint, under Section 12 of the Consumer Protection Act, (vide paras -5 and 6), not only do not deny that such amenities were assured to be provided, but have stated that some of the amenities stand provided and steps are in progress for providing the remaining. Therefore, the law laid down in the aforesaid judgment of the Hon''ble Supreme Court is not applicable to the facts of the present case.

It is true that the terms and conditions of auction provided that the shop was being put to auction on "as is where is basis" and the appellants can be said to be aware of this fact, but the terms and conditions themselves provided, vide Clause -23, that basic services like roads, water supply, sewerage, electricity etc. in the complex will be provided by the respondent. Also it has been conceded by the respondent in its reply, vide para -4 that toilets are to be provided and made functional by it and that the same have not been provided and made functional, because no business activity has commenced, so far. Explanation offered by the respondent for not providing light in the commercial complex and parking place is that the State Electricity Board has not installed transformers, from which lighting arrangement is to be made. In letter Annexure R -4 which the respondent addressed to the appellants, in response to their letter Annexure -G, it has been assured that light points in the parking will be provided soon, point for lift will also be provided soon and work for providing transformers will be accomplished shortly. Transformers have not teen provided, so far. We have teen shown a letter dated 6.1.2012, addressed by an Additional Superintending Engineer of Electricity Board to appellant No. 1 that work of new feeder and erection of four numbers of transformers is in progress. That means transformers which were assured to be provided soon, vide letter dated 22.4.2009 copy Annexure R -4 by the respondent, have not been provided, even after lapse of three years, with the result that electrification of the parking and the shopping complex has not taken place, so far.

It has been submitted on behalf of the appellants that a lift pit has been prepared on the site, but it is lying uncovered and, therefore, it is quite hazardous to make use of the shop, in question, as the customers, particularly, the children accompanying the customers, may accidentally, fall in that pit.

From the above discussion, it is clear that even after three years of assurance given to the appellants, vide letter dated 22.4.2009 copy Annexure R -4, electrification of the parking and the shopping complex has not taken place, transformers have not been provided, light point for lift has not been made available and toilets have also not been provided and made functional. As already noticed, these amenities were agreed to be provided by the respondent and having failed to provide the same, it (the respondent) is clearly guilty of deficiency in service, for which it is obliged to suitably compensate the appellants. In our judgment, a sum of Rs. 50,000 should be reasonable compensation for this delay of more than three years in providing the facilities"

IT is an admitted fact that shop in question was sold by way of open auction and one of the terms and conditions of the allotment was "as is where is basis". However, the terms and conditions of the auction are to be read as a whole and the condition "as is where is basis" is not to be read in isolation. The auction took place on 26.2.2008 and shop in question was allotted to the petitioners vide allotment letter dated 30.6.2008. Admittedly, possession of the shop in question was taken by the petitioners under protest. Petitioners as per their letter dated 12.8.2008 while accepting the possession have stated in categorically terms that: "1. No public utility services i.e. toilets, lifts, etc.

There is no Development reg. parking, pavements, roads and landscaping.

There is no electric wiring, Switches, Electric Board, Glasses (back doors) etc.

There is no provision for common drinking water in the whole complex.

Construction of whole complex is still going on and shuttering is hanging and therefore, it will be useless to start any......

There is no provision of Street Light in corridor and Parking Area in the complex.

In view of above deficiencies in development the offer of possession letter becomes infructuous and useless.

However, possession have been accepted under protest in view of your letter No. Himuda/shop No. SA/Phase -I & II/Baddi/Admn: dated 26.7.2008.

In view of these all above mentioned deficiencies, you are requested to kindly withdraw the possession offer with immediate effect."

THEREAFTER , in response to petitioners letters dated 23.8.2008 and dated nil received on 2.2.2009, the respondent vide its letter dated 22.4.2009 (Copy placed at page 57 of the paper book) replied as under: "It is intimated that report has been received from Executive Engineer, Parwanoo and short -comings were pointed out have been attended to as under:

No shuttering plates/scaffolding is existing at site now as the same have been removed.

Pavement work has been completed and only tarring is to be done which will be completed shortly.

The unwanted grass/bushes have been removed from the area.

Point with regard to fixing of light point in the parking will be provided soon.

Glass panes have been fixed.

Water line has been laid and is available.

Point for providing light to life etc. will be provided soon.

Painting and wiring work to shop is complete.

Service lane has been completed.

The work for providing transformer will be done soon.

So far as the calculations of interest on 75% bid money as pointed out on your letter dated 23.8.2008 the same has been correctly calculated according to the terms and conditions Nos. 10 and 11 stipulated in the brochure for auction of commercial units."

Thus, as per respondent''s own case, as on 22.4.2009 certain deficiencies were still there. The brochure with regard to "Terms and Conditions for Auction of Commercial Shops/Shop -Cum -Residence Sites in Housing Colony Baddi" is at page Nos. 69 to 74 of the paper book. Condition No. 23 of this brochure read as under: "23 All the open spaces, parks, parking, public amenities etc. shall be the property of the HP Housing & UDA and Authority reserves the right to use such spaces for any other purpose at its discretion as and when required. The Authority will only provide basic services like roads, water supply, sewerage, providing other amenities mentioned in the lay out plan which are for the purpose of land use only."

THUS , as per above condition No. 23, Respondent - Authority has to provide basic services like roads, water supply, sewerage, electricity etc. in the complex.

ADMITTEDLY , when physical possession of the shop was taken by the petitioners on 12.8.2008 (under protest); the above facilities had not been provided by the respondent. In Amarjeet Singh (supra), the Apex Court observed: "Where there is a public auction without assuring any specific or particular amenities, and the prospective purchaser/lessee participates in the auction after, having an opportunity of examining the site, the bid in the auction is made keeping in view the existing situation, position end condition of the site. If all amenities are available he would offer a higher amount. If there are no amenities, or if the site suffers from any disadvantages, he would offer a lesser amount or may not participate in the auction. Once with open eyes a person participates in an auction, he cannot thereafter be heard to say that he would not pay the balance of the price/premium or the stipulated interest on the delayed payment, or the ground rent, on the ground that the site suffers from certain disadvantages or on the ground that amenities are not provided. 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 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."

The Apex Court further observed:

"The lessee -respondents however, placed strong reliance on the following observations and directions in Para. 38 of the decision of this Court in Shantikunj (supra), to contend that commencement of interest could be postponed:

''We make it clear that though it was not a condition precedent but there is obligation on the part of the Administration to provide necessary facilities for full enjoyment of the same by the allottees. We, therefore, remit the matter to the High Court for a very limited purpose to see that in cases where facilities like Kutcha road, drainage, drinking water, sewerage, street lighting have not been provided, then in that case, the High Court may grant the allottees some proportionate relief. Therefore, we direct that all these cases be remitted to the High Court and the High Court may consider that in case'' where kutcha road, drainage, sewerage, drinking water, facilities have not been provided; no relief shall be granted but in case any of the facilities, had not been provided, then the High Court may examine the same and consider grant of proportionate relief in the matter of payment of penalty under Rule 12(3) and interest for delay in payment of equated installment or ground rent or part thereof under Rule 12(3A) only. We repeat again that in case the above facilities had not been granted then in that case consider grant of proportionate relief and if the facilities have been provided then it will not be open on the part of the allottees to deny payment of interest and penalty. So far as payment of installment is concerned, this is a part of the contract and therefore, the allottees are under obligation to pay the same. However, so far as the question of payment of penalty and penal interest is concerned, that shall depend on the facts of each case to be examined by the High Court. The High Court shall examine each individual case and consider grant of proportionate relief.''

The above observations and directions were apparently on the special facts and circumstances of that case. As noticed above, in Shantikunj, the auction was of the year 1989. The lessee had approached the High Court in its writ jurisdiction in the year 1999 seeking amenities. Even in 2006 when this Court heard the matter, it was alleged that the amenities had not been provided. It is in those peculiar facts that this Court obviously thought fit to give some reliefs with reference to penal interest wherever amenities had not been provided at all even after 17 years. In fact, this Court made it clear while remanding to High Court that wherever facilities/amenities had been provided before the date of the judgment (28.2.2006), the lessees will not be entitled to any reliefs and where the faculties/amenities had not been granted even in 2006, the High Court may consider giving some relief by proportionate reduction in penal interest. This direction was apparently on the assumption that in case of penalty, the Court can grant relief in writ jurisdictions.

But the facts of this case are completely different. The auction sale was in December 1996. The National Commission has recorded a finding that almost all the facilities/amenities had provided in the year 1999, that is within about two years. Therefore, the observations of this Court in para. 38 of Shantikunj will have no applications to these cases, particularly as they were made in the context of a writ proceeding, whereas we are concerned with a proceedings under Consumer Protection Act. We may also refer to another aspect. Section 7 of the Act empowers the Central Government to levy such fees and taxes as it may consider necessary (which ''shall'' be in addition to any fee or tax for the time, being leviable under any other law in respect of any site or building on the transferee or the occupier thereof, for the purpose of providing, maintaining or continuing any amenity at Chandigarh. This provision clearly demonstrates that the providing amenities is not linked to auction of plots on lease basis and the premium paid is not for providing any amenity. The Central Government is required to provide amenities by levying fees and taxes in respect of sites/plots on the transferees/occupiers thereof. Therefore, it is doubtful whether any proportionate reduction in penal/default interest could be made on the ground of non -provision of amenities. Be that as it may. As we have already held that para. 38 will not apply, we do not propose examine that aspect any further in these cases."

THUS , from the entire material on record we hold that as per respondent''s own case there are deficiencies on its part. The State Commission therefore rightly allowed the appeal of the petitioners. Moreover, the compensation as awarded by the State Commission in favour of the petitioners is quite reasonable and we do not find any ground whatsoever to enhance the same.

CONSEQUENT LY , the above noted revision petitions filed by the petitioners as well as the respondent, are not maintainable as the impugned order passed by the State Commission is based on sound reasoning and there is no infirmity or illegality in the same. Hence, both revision petitions stand dismissed. No order as to cost. Revision Petitions dismissed.