Chandigarh

DF-I

CC/638/2021

ATTINDER PAL SINGH - Complainant(s)

Versus

CHANDIGARH HOUSING BOARD - Opp.Party(s)

01 Aug 2022

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

 

                    

Consumer Complaint No.	:	CC/638/2021
Date of Institution	:	22/09/2021
Date of Decision	:	01/08/2022

 

Attinder Pal Singh, House No.5525, Sector 38-West, Chandigarh-160014.

… Complainant

V E R S U S

Chandigarh Housing Board (CHB), 8, Jan Marg, 9-D, Sector 9, Chandigarh-160022.

… Opposite Party

CORAM :	SURJEET KAUR	PRESIDING MEMBER
	SURESH KUMAR SARDANA	MEMBER

 

                                                

ARGUED BY	:	Complainant in person.
	:	Sh.Indresh Goel, Counsel for OP.

 

Per Suresh Kumar Sardana, Member

1.      Averments are that the complainant had purchased leasehold house from Chandigarh Housing Board (CHB), in E-auction in December, 2017. The complainant had planned for conversion of his leasehold property to freehold. As per terms and conditions of CHB the complainant cleared all dues (that is ground rent of the leasehold property) till 10.01.2019 and received no objection certificate from CHB. As per complaint, on 25.10.2018, he applied for freehold conversion for his house. The OP accepted the request for leasehold conversion and was given a target date of 22.11.2018 for the completion of this conversion, but the whole process was stretched till 25.02.2020 due to the ill-planning and preparedness of OP. In response to complainant reminder for one year delay, it was intimated by CHB that the matter is still under discussion. As per the clarification received from Chandigarh Administration on 14.01.2020, OP added an additional ground rent of one year amounting to RS.7,78,443/- due to delay. The OP asked the complainant to pay Rs.15,58,308/- inclusive of GST as ground rent by the end of July, 2020.

         As per complainant being aggrieved he approached Right to Service Commission wherein it was held that “it was beyond the purview of this Commission to comment upon the legality or justification on the part of CHB to levy ground rent and penalty for the years 2019 and 2020 due to limited scope of the Right to Service Act.” However, considering all the facts and circumstances of the case and in larger interest of justice, would like to urge competent authority in CHB that if the petitioner makes a formal request for waiver of ground rent and penalty for the years 2019 and 2020, the same should be considered sympathetically for the simple reason that for whatever reasons the delay has occurred on the part of CHB in processing the conversion case, none of those reasons is attributable to the petitioner and this being so, he does not deserve levy of any ground rent and/or penalty for the years 2019 and 2020.” On 10.08.2020 the complainant requested OP to waive off the ground rent for the years 2019-20 and 2020-21 which OP refused but waived off the penalty imposed for late payment. After the conversion of the property from leasehold to freehold, complainant applied for the refund request to CHB for previous amount of Rs.10,14,098/- paid under protest on 20.08.2020, but all in vain. Hence, alleging the aforesaid act and conduct of the Opposite Party as deficiency in service and indulgence into unfair trade practice, the Complainant preferred the present Complaint.

2.     OP contested the consumer complaint. As per it, the complainant was informed regarding provisional conversion charges and was informed that actual and exact fee applicable in this case will be informed to OP after the receipt of his application for conversion charges of his dwelling unit in this office at reception counter. The complainant was informed that if he wanted to take up his request for reduction of the said amount, he could approach to Chandigarh Administration. As per OP, the said case was put up to the higher authority for approval to demand the conversion charges from the applicant but observation was raised by the SLO, CHB to re-examine the conversion charges as it seems to be on lower side keeping in view of the annual ground rent fixed in this case. After discussion with the higher authorities, it was decided to send the matter to Chandigarh Administration for clarity. The allottee submitted a request to waive off ground rent for the delay period due to slow processing and long delay of converting from lease hold to free hold by CHB. It was submitted that there was no intentional delay on the part of the OP for processing the conversion case and seeking clarification from the Chandigarh Administration and the whole exercise was done bonafidely. There was no mala fide intention and the complainant was treated as any other allottee.

         However in view of the observation of the Commissioner Right to Service, UT Chandigarh, it was suggested that the interest/penalty charges of Rs.2,55,600/- payable to the CHB may be exempted as an exceptional case, however, it will not be treated as precedent. In view of the orders of Worthy Chairman and the Chief Executive Officer, Opposite Party approved to exempt the interest on ground rent amounting to Rs.2,55,600/- being exceptional case. Further the complainant was conveyed vide this office dated 06.05.2021 that his request for refund of extra ground rent of Rs.10,14,098/- has been rejected. The complainant has already availed the concession given by the OP which he has not disclosed in the complaint. Therefore, there has been no deficiency in service and the OP is not liable to pay any compensation.  Denying all the material allegations of the complainant, prayer for dismissal of the complaint has been made.

3.     Rejoinder was filed and averments made in the consumer complaint were reiterated.
4.     Parties led evidence by way of affidavits and documents.
5.     We have heard both the parties and gone through the record of the case. After perusal of record, our findings are as under:-
6.      Admittedly, in the present case, the dispute is with regard to delay in conversion/transfer of title of leasehold site/plot (immovable property) of the complainant into freehold basis, by the opposite party and charging of extra money on account of conversion charges. Under above circumstances, the only short question which needs to be decided by this Commission is, as to whether, the case of the complainant alleging deficiency in service on the part of the opposite party on the ground of non conversion/transfer of the plot in question in their favour, falls under the purview of consumer 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.……”

7.      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, resultantly, we are of the considered view that the District Commission lacks jurisdiction to give any directions to the opposite party in matters relating to conversion of the plot of the complainant from leasehold to free hold site.  
8.     In view of the aforesaid discussion and the reasons recorded hereinbefore, we do not find any deficiency in service or unfair trade practice on the part of the Opposite Party. Accordingly, the consumer complaint, being meritless, is hereby dismissed, leaving the parties to bear their own costs. However, the complainant shall be at liberty to agitate the issue mentioned above before a Court of competent jurisdiction/ appropriate Forum.
9.     Certified copies of this order be sent to the parties free of charge. The file be consigned.

	Sd/-	Sd/-
01/08/2022	[Suresh Kumar Sardana]	[Surjeet Kaur]
Ls	Member	Presiding Member