STATE CONSUMER DISPUTES REDRESSAL COMMISSION OF TELANGANA :

AT HYDERABAD

CC NO. 78 OF 2014

Between :

M/s NR Biomedical Engineers (P) Ltd.,

24-92, Laxmi Narayan Nagar Industrial Area,

Uppal, Hyderabad – 500 039.

Rep. by B.G.Narendra babu

S/o Ganpath Rao.

Complainant

And

1)       Greater Hyderabad Municipal Corporation

          (GHMC), having its office at CC Complex,

          Tank Bund Road, Hyderabad – 500 029,

          Rep.through its Commissioner.

2)       GHMC Zonal Commissioner (East Zone),

          LB Nagar, Hyderabad – 500 074.

3)       Deputy Commissioner, Circle-2,

          Uppal, Hyderabad – 500 039.

Opposite parties

Counsel for the Complainant     :         Complainant-in-person

Counsel for the Opposite parties         :         Sri P.H.Pannaga Sai

Coram                   :

Hon’ble Sri Justice B.N.Rao Nalla      …       President

and

Sri Patil Vithal Rao        …       Member

Tuesday, the Eighteenth day of October

Two thousand Sixteen

Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)

***

          This is a complaint filed under section 17 of the Consumer Protection Act, 1986 by the Complainant complaining deficiency of service on the part of Opposite parties seeking direction to pay Rs.18-00 lakhs towards monetary loss due to flooded water in to the factories; Rs.3-24 lakhs towards monetary loss; Rs.0-42 lakhs towards loss on account of theft and burglary; Rs.1-8 lakhs towards damage to cars and other vehicles; Rs.12-00 lakhs towards amount spent for treatment of air-borne diseases; Rs.4-3 lakhs towards loss incurred due to bad productivity and to pass such other order or orders as may be deemed fit and proper in the circumstances of the case.

2.       The case of the Complainant, in brief, is that the Complainant is a small scale industry established by self-entrepreneurs and qualified bio-medical engineers registered with District Industries Centre, Balanagar bearing No.01-22-64491, dated 22.02.1999.  It is the manufacturing unit producing electronic neo-natal medical equipment viz., neo-natal baby incubators, radiant warmers for premature babies, photo therapy units for jaundice management etc.,  The industry is set-up with the support and encouragement of Industries & Commerce Dept (SSI), utilizing the subsidy schemes that were available for self-entrepreneurs. The DIC gave clearances to these entrepreneurs and were made eligible for subsidies from APSEB and sales tax department. 

3.       The Complainant would supply the equipment all over the country including World Bank projects of A.P. Vaidya Vidhana Parishad, Karnataka Health Systems Development Project, West Bengal Health Systems Development Project, Uttar Pradesh Health Systems Development Project and defense hospitals all over the country.  The OP, being responsible for developing and maintaining the infrastructure for the well-being of its citizens in twin cities.  Like other bodies, MCH used to provide civic as well as infrastructure facilities to the inhabitants such as laying of roads, maintenance of streets, public health, sanitation, etc.,  In 2007, along with 12 other municipalities were merged to form the GHMC which covers an area of 626 sq.kms.  It was formed to make sure that the surrounding areas around the city are developed.

4.       The Complainant industry was established in 1999, the then Uppal Kalan Municipality assessed the building and fixed the property tax at Rs.4,218/- p.a. for 1999-2000 and there were civic amenities such as ground water (totally polluted, unfit even for usage of construction of the building); approach road; street lights; drinking water; drainage system; sweeping of roads; garbage collection.  Instead of providing these amenities, the OP enhanced the property tax from Rs.4,218/- to Rs.11,389/- from 2002-2003 without any development in the area, and withdrew the existing facilities to the area in Sy.No.553 of Laxmi Narayan Nagar, Uppal with effect from January 2002.  As a result of which, the roads have become from bad to worst.  The waterline is withdrawn as a domestic line. 

5.       All the representations fell on the deaf-ears of the Opposite party and the Complainant had been running the industry with no civic amenities in the area.  All the other streets of Laxmi Narayan Nagar (that falls on the south side of Industrial area) have been laid with concrete cement roads with underground drainage system.  On other hand, the IDA Uppal roads (that falls on the northern side) have been re-laid by the Uppal Industrial Municipality.  All the rain water used to flood into the small scale industries upto knee level making the lives miserable and the rainy season making unhygienic the septic tanks, toilets, office space and the work space. 

6.       On account of the above hardships, the Complainant’s industry became sick as it could not meet the targets of supply to various World Bank Projects.  A notice was issued on 20.01.2011 seeking payment of Rs.12,411/- towards property tax.  The GHMC served another property tax special notice on 17.11.2011 showing the existing property tax as Rs.24,821/- and enhancing it to Rs.58,584/- plus library cess of Rs.4687/- plus 25% unauthorized construction penalty of Rs.14,646/- totaling to an amount of Rs.77,917/-.  Though it was informed that the building has been constructed in pursuance of G.O.Ms.No.63 of Industries and Commerce (SSI) Dept., the OP has labelled the same as “unauthorized construction” and levying penalty. 

7.       The Complainant made another representation on 21.11.2011 expressing dissatisfaction with the assessment and requested to revise the same as there were no civic amenities since last 12 years in the area.  Without making any enquiry on our representation, again the OP issued another demand notice on 13.08.2012 seeking to pay the property tax of Rs.65,002/- for 2012-2013.  However, the Complainant remitted the half yearly tax of Rs.12,411/- from October 2011 to October 2013.  The OP failed to provide basic services including sanitation (both sewer & refuse), water, street lights, roads, health and transport services.  On an application under RTI Act, they could only furnish the details of surrounding areas of Sy.No.553 but not of it.

8.       On account of negligence on the part of the OP in providing basic civic amenities, complainant incurred huge losses due to water flooding into the unit, damage of equipment and stocks interrupting regular activities, developed ‘dust allergy’ and bronchitis due to non-availability of concrete roads, thefts and burglary due to non-availability of streetlights, damage of suspension systems to vehicles due to worst road conditions, health hazards due to bad sanitation and no under-ground drainage facilities, fire accidents due to non-collection of garbage and accumulation of inflammable materials, water borne diseases due to non-availability of drinking water and on account of contamination of ground water with polluted chemicals, lost earnest money deposits and performance guarantee bonds as most of the projects were time based.  Hence the complaint claiming loss of Rs.39.76 lakhs.

9.       Ops resisted the claim contending that the complaint is false with false, baseless, concocted grounds and concealing the material facts as against issuance of demand notice of property tax for Rs.3,87,366/-.  A reading of the complaint as a whole does not show that the Complainant is ‘consumer’ within the meaning of Section 2 (1)(d)(ii) of the Act as it is not stated anywhere that it hired or availed of any services from the Ops for a consideration.  Payment of taxes to Municipal Corporation for development and maintenance cannot be termed as consideration under the Act. 

10.     Any dispute with respect to the property tax, the competent authority is the Chief Judge, City Small Causes Court, Hyderabad.  Complainant is not entitled for any reliefs.  Complainant failed to issue any mandatory notice u/s 685 of the HMC Act before filing the complaint.  Complainant is a willful defaulter in paying the property tax with respect to property bearing No.2-24-92, Laxmi Narayana Colony, Uppal.  The GHMC is a statutory authority working in the interest of public at large within the vicinity of 18 circles covering 625 kilometers area in and around the twin cities, Medak and Rangareddy districts. 

11.     It denied to have withdrawn any civic amenities such as ground water, road, streetlights, drinking water, drainage system, sweeping of roads, garbage lifting, etc., The proceedings bearing No.AC/EZ/1902/2013-14, dated 18.02.2014 were issued only after considering the representations, objection petition and revision petition and after conducting a hearing on 27.01.2014.  The complainant, as against sanctioned plan, constructed first floor without permission and erected cell tower on the top of the first floor without permission.  There is no deficiency of service.  It denied to have sustained any loss by the Complainant.

12.     The Complainant failed to comply with the interim orders passed by this Commission on 20-04-2014 with condition to deposit 50% of the demanded amount, compelling the Ops to seize the goods and chattels from the possession of complainant. The Ops are ready to release the seized ones if this commission orders deposit of 50% of demanded amount or in alternate permit the ops to auction the seized goods.  If the property tax payers evade payment, the ops, being statutory body will be paralyzed in discharging its duties and providing civic amenities to the citizens.  Hence, prayed to dismiss the complaint with exemplary costs.

13.     On behalf of the Complainant, B.G.Narendra Babu, filed the evidence affidavit and the documents, Exs.A1 to A14.  On behalf of the Opposite parties, one P.Viswanath, Deputy Commissioner of the OP No.3 filed the evidence affidavit and the document, Ex.B1.

14.     Both sides filed the written arguments and the matter is taken as heard. 

15.     The points for consideration are :

i)        Whether the Complainant is a ‘consumer’ as defined under the Act and whether there is any negligence and deficiency in service on the part of the Opposite parties and whether the Complainant is entitled for the reliefs as prayed for?

ii)       To what relief ?

16.     POINT NO.1 :  It is not in dispute that the Complainant is running a SSI unit at the premises bearing No.2-24-92, Laxmi Narayan Nagar, Industrial Area, Uppal, Hyderabad.  It is also not in dispute that the Ops have made demand for payment of Rs.3,68,896/- by proceedings No.AC/EZ/1902/2013-14, dated 18.02.2014.  The present complaint is filed seeking for payment of compensation on account of non-providing the civic amenities such as ground water, road, street lights, drinking water, drainage system, sweeping of roads, garbage lifting, etc., to the tune of Rs.39.76 lakhs.

17.     In support of its claim, the Complainant exhibited A1 to A14 documents.  Ex.A1 is the copy of Land Use Certificate showing the land in survey number 553 earmarked for Industrial purpose.  Ex.A2 is the copy of G.O.ms.No.63, dated 02.05.1995 with respect to exemption of approvals and clearances by various departments for setting-up of Small Scale industrial Units.  Ex.A3 is the Special notice, dated 26.07.1999 for Rs.4,218/-.  Ex.A4 is the representation made by the Complainant, dt.06.11.2002.  Ex.A5 are the photographs showing the photographs of water logging, non-lifting of garbage, etc.,  Ex.A6 the notice of demand for payment of Rs.1,06,999/-.  Ex.A7 is the representation made by Complainant, dated 27.01.2011.  Ex.A8 is the special notice issued by the Ops demanding payment of Rs.77,917/-.  Ex.A9 to A11 are various representations made by Complainant to the Ops enclosing the photographs.  Ex.A12 are the Photostat copies of payments made by Complainant towards property tax to the Ops.  Ex.A13 is the information furnished by Ops under RTI Act to B.G.Narendra Babu.  Ex.A14 is the proceedings No.AC/EZ/1902/2013-14, dt.18.02.2014 informing the Complainant to pay Rs.3,68,896/-.

18.     The learned counsel for the Ops would contend that the Complainant is not a ‘consumer’ as defined under the Act and there is no hiring or availing of services.  It is to be stated that the distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary motive of regulation in public interest. If the element of revenue for general purpose of the State predominates, the levy becomes a tax.  The legal position must now be taken to be well settled that unlike a "fee", a "tax" in its true nature is a levy made by the State for the general purposes of Government and it cannot be regarded as payment for any particular or special service. While, it is undoubtedly true that the Government in a welfare State is under a duty to provide various forms of facilities including civic amenities to its citizens and the expenditure incurred thereon will have to be, met from out of the consolidated fund of the State, it cannot be said that a tax levied for the general purposes of the State construes "consideration" for any specific facility, benefit or service provided by the State.

In the decision of A.Srinivasa Murthy v. Chairman, Bangalore Development Authority, reported in (1992) II CPJ 395, relying on an earlier decision of the Commission, it was held by the National Commission that payment of tax which goes into the general revenue of the State or local authority will not legally constitute payment of consideration for any specific service.

In National Forum for Consumer Protection v. Keonjhargarh Municipality and Ors., reported in (1993) II CPJ 1109, the Orissa State Commission held that although payment of fee for any service amounts to hiring the service, since fee involves quid pro quo, payment of tax is not a consideration for any service since in tax there is no quid pro quo.

19.     The Punjab State Consumer Disputes Redressal Commission in the decision of Laxmi Narain Goel v. Punjab Water Supply and Sewerage Board and Others reported in (1993) III CPJ 1333, considered the question as to whether payment of house tax is consideration for hire and whether while paying, such house tax payer is a consumer within the purview of the Consumer Protection Act. Relying on the decision of the National Commission in Consumer Unity & Trust Societies Act (supra), the State Commission held as follows:

The learned Counsel for the complainant-appellant has vehemently argued that the members of the public pay house tax and other taxes to the Government and that the sewerage system is maintained by the Punjab Water Supply & Sewerage Board out of the revenue so secured and the payment of taxes is therefore, sufficient consideration for the service of maintenance of sewerage system. This argument of the learned Counsel misses the most essential feature of the concept of hire. The consideration for hire, be it called fee, charge or rent is that it is voluntary payment, it is open to a person to make the payment and hire the service or refuse to pay and forego the service. A tax on the other hand is a levy or imposition made by the Government for public purpose. There is no element of voluntariness in the payment of tax. No tax payer has the option to refuse to pay the tax legally imposed on him. It is, therefore, clear that the payment of tax to the Government cannot be construed as consideration for the services rendered by the Government

20.     This point has been answered directly by the National Commission in Consumer Unity and Trust Society, Jaipur v. State of Rajasthan (1991 (1) C.P.R. 241 : II (1991) CPJ 56). It has been held in that decision that the payment of taxes cannot be regarded as consideration for service rendered by the Government. The same principle applies to taxes paid to the Municipal Corporation. We, therefore, agree with the contention of the learned counsel for the Opposite parties and hold that the complainant is not a 'consumer' as defined under the provisions of the Consumer Protection Act, 1986.

21.     In the light of above observations, we may state that basically assessment of property tax cannot be termed as service. The taxpayer is not a ‘consumer’. The complainant can as well question the assessment made in an appropriate forum constituted under the HMC Act, or can file a civil suit questioning the arbitrariness in taxing its property and also can seek remedies for non-providing of civic amenities.  We follow the proposition of National Commission and also Thrissur Municipal Corporation vs Ummer Koya Haji, reported in 2006 (3) KLT 897 wherein it was observed:

While local bodies do certain acts as services rendered for payment of fee in respect of which there is quid pro quo coming within the purview of the Consumer Protection Act; in respect of the sovereign functions exercised by the local bodies by way of collection of taxes like property tax, profession tax and other taxes, it cannot be said that the local bodies are rendering any services, in respect of which the tax payer can maintain a complaint under the Consumer Protection Act. Therefore, in respect of payment of property tax, no complaint would lie before a Consumer Disputes Redressal Forum or Commission.

We are in complete agreement with the conclusions arrived at in the above said decisions as also the reasoning contained therein.  While local bodies do certain acts as services rendered for payment of fee in respect of which there is quid pro quo coming within the purview of the Consumer Protection Act, in respect of the sovereign functions exercised by the local bodies by way of collection of taxes like property tax, profession tax and other taxes, it cannot be said that the local bodies are rendering any services, in respect of which the tax payer can maintain a complaint under the Consumer Protection Act.  Therefore, in respect of payment of property tax, no complaint would lie before a Consumer Disputes Redressal Forum or Commission."

22.     The Complainant would also contend that the Ops failed to furnish the complete information sought under the Right to Information Act.  In regard to Right to Information Act, 2005, by no stretch of imagination, the consumer fora can be termed as appropriate forum where the complainant could agitate. The information sought for under RTI Act cannot be termed as service, nor the complainant a consumer vis-à-vis opposite parties in order to attract the provisions of Consumer Protection Act to ventilate its grievance. We do not intend to state that the complainant has no other recourse. However, it is up to it to ventilate its grievance in an appropriate forum. As far as non-furnishing of information under RTI Act is concerned, the National Commission in T. Pundalika Vs. Revenue Department (Service Division), Govt. of Karnataka in R.P. No. 4061/2010 decided on 31.3.2011 observed:

Petitioner in order to sort out the controversy with respect to his pensionary benefits, filed an application under Right to Information Act, 2005 (hereinafter referred to as the RTI Act, 2005) in the office of Opposite Party No.4. Opposite Party No.4 failed to provide the information. Petitioner then filed the complaint before the District Forum, which was allowed and a direction was issued to opposite party No.4 to furnish the required information.

Respondent, being aggrieved, filed an appeal before the State Commission, which has been allowed by observing thus:

At the outset, it is not in dispute that complainant had filed an application u/s 6 & 7 of the Right to Information Act to the OP.No.4. But complainant cannot be considered as a consumer as defined under the C.P. Act since there is a remedy available for the complainant to approach the appellate authority u/s. 19 of the RTI Act, 2005.

We agree with the view taken by the fora below. Petitioner cannot be claimed to be a consumer under the Consumer Protection Act. There is a remedy available for him to approach the Appellant Authority under section 19 of the RTI Act, 2005.

23.     As an alternative efficacious remedy is provided under the very Right to Information Act, 2005, their Lordship observed that the Consumer Protection Act has no jurisdiction to the disputes arising under RTI Act. The contention that the Consumer Protection Act overrides RTI Act cannot be upheld. In the light of Sec.22 of RTI Act, it cannot be said that the provisions of the Consumer Protection Act overrides the RTI Act which reads as follows :

“22. Act to have overriding effect:-

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in the Official Secrets Act, 1923 (19 of 1923), and any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. From this it is beyond doubt that this Act however, has an overriding effect in that the authorities under this Act may make independent decisions about the question whether such disclosure or non-disclosure has any overriding public interest. Therefore, it may become necessary for the authorities to independently decide whether disclosure of information which itself being an act done in public interest, overweighs the public interest sought to be protected under those enactments.

In this context, Section 23 is also worth to be mentioned.

23. Bar of jurisdiction of Courts :- No court shall entertain any suit, application or other proceeding in respect of any order made under this Act and no such order shall be called in question otherwise than by way of an appeal under this Act.”

24.     In the instant case, merely because the Ops are collecting taxes from general public; that does not mean that due to payment of said tax, the services of Ops were hired by complainant or general public. Moreover, the representations made by the Complainant under Ex.A4, A9 to A11 were acted upon by the Opposite parties by way of orders in proceedings under Ex.A14. The legality or otherwise of that rejection proceedings/order cannot be considered in this consumer complaint.  Thus, we find that the Complainant had not proved that there is deficiency of service on the part of the Opposite parties nor it is established that the Complainant is a ‘consumer’ as defined under Section 2 (1)(d) of the Act.  We may say that the complainant is before a wrong Forum because before a person approaches a Forum under the Consumer Protection Act, 1986, he has to qualify himself to be a consumer, an expression which has been defined under Section 2(1)(d)(i) or (ii) of the C.P. Act, 1986 and further explained in the explanation below it and the Ops have got to be either traders or service providers.  We are not impressed with the submissions of the Complainant.  We find that the Complainant is before a wrong forum.  The complainant in this case has not bought any goods for consideration from the Ops nor has hired or availed of any services from them for consideration.  In view of our discussions supra, we answer this point in favour of the Opposite parties and against the Complainant.  In the result, the point No.1 is decided in negative and consequently, the complaint deserves to be dismissed.

25.     POINT No.2 : In view of answering the point No.1 against the Complainant, the point No.2 needs no consideration. 

26.     In the result, we dismiss the complaint but in the circumstances, parties to bear their own costs.  The interlocutory applications, if any, shall also stand closed.

PRESIDENT           MEMBER

Dt: 18.10.2016

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

For Complainant :                                        For Opposite parties :

Affidavit evidence of Mr.B.G.Narendra           Affidavit evidence of P.Viswanath,

Babu, M.D. of Complainant                          Deputy Commissioner, for OP No.3.

EXHIBITS MARKED

For Complainant :

Ex.A1   Copy of Land Use Certificate furnished by the HUDA in respect of Sy.No.553 of Uppal Kalan earmarking for industrial purpose.

Ex.A2   Copy of G.O.Ms.No.63, Industries & Commerce (SSI) Department, dated 02.05.1995.

Ex.A3   is the Special Notice of Property Tax New Assessment, bearing No.556, dated 26.07.1999 issued by the Commissioner, Uppal Municipality.

Ex.A4   is the Representation made by the Complainant, dated 06.11.2002 to the Municipal Commissioner, Uppal Kalan Municipality, Uppal.

Ex.A5   are the various photographs showing the water-logging, non lifting of garbage, fire incidents, etc.,

Ex.A6   is the Notice of Demand bearing No.7434/2010-11, dated 07.01.2011 issued U/s 268 of HMC Act, 1955 by the Deputy Commissioner, Circle No.2, GHMC, Hyderabad.

Ex.A7   is the office copy of Representation made by Complainant to the Ops, dt.27.01.2011.

Ex.A8   is the Property Tax Special Notice-New Assessment/Revision, dated 11.08.2011 issued U/s 220(2)(3) of HMC Act by the Deputy Commissioner, Circle-2, GHMC.

Ex.A9   is the office copy of Representation made by the Complainant to Ops, dt.21.11.2011.

Ex.A10 is the office copy of representation made by the Complainant to Ops, dt.03.12.2011.

Ex.A11 is the office copy of representation made by the Complainant to Ops, dt.21.09.2012 along with the photographs enclosed thereto.

Ex.A12 are the copies of bankers’ cheque, demand draft and pay order for various amounts, favouring the Ops.

Ex.A13 is the intimation given by the Ops under RTI Act, dated 06.03.2014 to the application dated 23.02.2014 made by the Complainant.

Ex.A14 is the orders passed in proceeding No.AC/EZ/1902/2013-14, dated 18.02.2014 by the Deputy Commissioner, Uppal Circle, GHMC.

For Opposite parties :

NONE

PRESIDENT           MEMBER

Dt: 18.10.2016