STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

(APPEAL NO.5 OF 2010)

                                                          Date of Institution :  07.01.2010

                                                          Date of Decision  :  12.10.2010

Chandigarh Housing Board, Sector 9-D, Chandigarh through its Secretary

……OP/Appellant

V e r s u s

Sharwan Kumar Kohli s/o Sh. Ram Rakhawal r/o H.No.C-II/88, Baga Nagar, Dr. Zair Hussain Marg, New Delhi through its Genereal Power of Attorney Sh. Raghbir Singh s/o Sh. Sucha Singh r/o H.No.3726, Sector 46-C, Chandigarh.

              ....Complainant/Respondent.

BEFORE:          HON’BLE MR. JUSTICE PRITAM PAL, PRESIDENT.

                    MRS. NEENA SANDHU, MEMBER

                    SH. JAGROOP SINGH MAHAL, MEMBER.

Argued by:          Sh. K.K. Gupta, Advocate for the Appellant.

                    Sh. Munish Jolly, Advocate for Respondent.

PER JAGROOP SINGH MAHAL, MEMBER.

1.                 This is OP’s appeal under section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act) against the order dated 30.11.2009, passed by Learned District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter referred to as District Forum), directing the OP/appellant to pay Rs.70,660/- to the complainant for having charged him excessively on account of interest/penalty on the instalments of consideration money as well as ground rent; to pay a compensation of Rs.30,000/- for causing him physical harassment, mental agony and torture and to pay Rs.5,000/- as litigation expenses. The aforesaid amounts were ordered to be paid within six weeks from the receipt of certified copy of the order failing which the OP would be liable to pay the entire amount except (costs of litigation) alongwith interest @ 18% per annum from the date of filing of the complaint i.e. 31.8.2007 till realization.

2.                           The present complaint was filed by the complainant/respondent through his general attorney Sh. Raghbir Singh alleging that dwelling unit was allotted to him by the OP/appellant vide letter dated 10.1.1983 (Annexure C-1).  He was to make the initial payment of Rs.12,370/- and to pay the remaining amount in instalments of Rs.992/- every month for a period of 10 years.  The complainant claimed to have paid the entire amount and requested the OP/appellant vide his letter dated 9.5.2005 (Annexure C-2) to issue the no due certificate and when no reply was received, he sent a reminder dated 10.1.2006 (Annexure C-4).  He issued reminders/applications dated 19.5.2005, 8.11.2005 and 10.1.2006.  He then applied on 17.8.2006 vide Annexure C-5 under the Right to Information Act upon which he received a reply vide Annexure C-6 dated 19.9.2006 informing him that the case was under process.  The OPs vide their letter dated 12.10.2006 raised a demand of Rs.85,669/- before the no due certificate was issued, out of which the complainant deposited Rs.20,000/- vide Annexure C-8 on 29.11.2006 but the OP/appellant again wrote a letter dated 11.1.2007 which was resented by the complainant/appellant alleging that he was being excessively penalized and the accounts were required to be looked into.  He again wrote a letter dated 20.4.2007 (Annexure C-12) to which he received a reply dated 26.5.2007 (Annexure C-13). The complainant deposited Rs.66,122/- on 14.5.2007 and Rs.5992/- on 9.7.2007. This amount was deposited under protest. The contention of the complainant is that excessive interest @ 25% per annum has been charged from him which was otherwise not payable.  The penalty could not exceed 10% per annum but it had been charged @ 32% and 66% which are against the allotment letter.  The complainant, therefore, filed the present complaint alleging that the OP have charged Rs.1 lac in excess of what was due from him and he demanded Rs.5 lacs as compensation on account of deficiency in service.

3.                 The complaint was opposed by the OP/appellant alleging that he has no locus standi to file the complaint on behalf of the allottee, that he never paid the instalments in time and was, therefore, liable to pay interest.  It was denied if any excess amount has been recovered from the complainant.  It was admitted that he was requested to deposit Rs.66,122/- vide letter dated 31.5.2006 but the said amount was deposited on 18.6.2007. The no due certificate was alleged to have been issued at his address but was received back refused by the addressee.  The contention of the OP/appellant was that the complaint is liable to be dismissed.

4.                 Both the parties were given opportunity to lead evidence in support of their contentions.

5.                 The ld. District Forum vide the impugned order dated 30.11.2009 held that interest could be charged on delayed payment of instalments at the maximum of 10% every month, that no interest/penalty could be charged on the amount of ground rent and, therefore, the OP/appellant have recovered from the complainant Rs.70,660/- in excess of that due from him.  The ld. District Forum, therefore, directed the OP to refund the aforesaid amount and also to pay Rs.30,000/- as compensation for causing him physical harassment, mental agony and torture and also to pay Rs.5,000/- as litigation expenses.

6.                 The OP have preferred this appeal against the impugned order.

7.                 We have heard the arguments of the ld. Counsel for the parties and have perused the record.

8.                 The ld. Counsel for the OP/appellant has attached with the memorandum of appeal a statement at page 67 to 70 showing as to on which date the instalment of Rs.992/- was due from the complainant, on which date it was paid, what amount have been charged as penalty and what excess amount was deposited by the complainant.  It is admitted by the ld. Counsel for the appellant that on account of instalments the complainant has paid Rs.82,332.24 in excess of that due from him.  His contention is that not more than 10% interest/penalty has been charged from the complainant and, therefore, the contention of the complainant that he was charged 25% or more is totally wrong.  We do not find any merit in this contention.  When the complainant asked for the no due certificate, vide his letter dated 9.5.2005 (Annexure C-2) with reminders dated 8.11.2005 (Annexure C-3) and 10.1.2006 (Annexure C-4), no reply was sent to him.  Ultimately he moved an application (Annexure C-5) to obtain information under the Right to Information Act and was informed vide Annexure C-6 that his case was under process.  Annexure C-7 is the letter dated 12.10.2006 showing that a sum of Rs.85,669/- was due from him.  The complainant, however, alleged that he has already  paid Rs.2,004/- in excess. He, however, deposited Rs.20,000/- more but even then the OP were not satisfied and sent him a letter dated 11.1.2007 (Annexure C-9) requiring him to deposit Rs.66,487/- upto 31.1.2007.  Alongwith this letter, calculations were sent to him which show that the complainant was being charged penalty/interest @ 25% per annum. The ld. Counsel for the OP was at a loss to explain as to how interest/penalty at that rate could be charged when in view of clause 7 of the allotment letter (Annexure C-1) interest/penalty could not exceed 10%.  The OP were obviously charging exorbitant rate of interest from the complainant and that is why they extracted from him a sum of Rs.82,332.24 in excess of that due from him.  The OP subsequently realized their mistake and appear to have overhauled the account and produced the account statement alongwith the memorandum of appeal thereby charging only 10% penalty on the delayed payments which is in consonance with the allotment letter.  It, therefore, cannot be said if there was no deficiency in service on the part of the OP in this respect.

9.                 The ld. District Forum is of the opinion that no penalty/interest could be charged on the ground rent payable by the complainant.  It was held that there was no provision for charging interest or penalty in the allotment letter whereas the provisions of The Chandigarh Housing Board (Allotment, Management and Sale of Tenements) Regulations, 1979 (for short hereinafter referred to as the 1979 Regulations) were not mentioned in the allotment letter to authorize the OP/appellant to charge interest/penalty on the late payment of ground rent.  The ld. District Forum also took strength from the judgment reported as Patiala Inds. Investment Co. (P) Ltd. Vs. Union of India & Anr.  Reported as 2003 (3) SCC 127 and held that interest @ 24% per annum could be charged only w.e.f. 22.7.1993 and not prior to that.  We, however, do not find the reasoning given by the ld. District Forum as correct.

10.             Clause 10 of the allotment letter provides about the payment of ground rent @ Rs.739.20 per annum for the first 33 years with enhancement for the next 33 years and further 33 years.  It was mentioned in sub clause (ii) of clause 10 of the allotment letter (Annexure C-1) that the lease of the land under the dwelling unit shall further be subject to the provisions of the Chandigarh Leasehold  of Sites and Building Rules, 1973 (for short hereinafter referred to as the 1973 Rules) framed by the Chandigarh Administration.  Sub Rule 3-A of Rule 12 of the Rules ibid provides as follows :-

          “3-A.          In case any equated instalment or ground rent or part  thereof is not paid by the lessee by the date on which it became payable he shall be liable to pay in respect of that instalment or ground rent or part thereof as the case may be, interest calculated at the rate of twenty four per cent per annum from the date on which the instalment or ground rent became payable till such date it is actually paid.”

There is, therefore, a provision of charging interest @24% per annum from the date on which the instalments or ground rent became payable till such date it is actually paid.  The rate of interest was initially 12% per annum and was enhanced to 15% per annum vide notification dated 29.11.1990.  Sub Rule 3-A was added vide notification dated 15.12.1979 which means that it existed on 10.1.1983 when the allotment was made to the complainant vide Annexure C-1.  There is no doubt that on 10.1.1983 the rate of interest was low as compared to the subsequent period but there was definitely the provision to recover interest on the delayed payment of ground rent.  The contention of the ld. Counsel for the appellant is that initially the interest was 12% and was enhanced to 15% vide amendment dated 29.11.1990.  It was then enhanced to 24% vide amendment dated 22.7.1993.  It, therefore, cannot be said if there was no provision in the 1973 Rules to charge penalty/interest on delayed payment of ground rent by the allottees.

11.             The ld. Counsel for the complainant has referred to calculations at page 71 of the appeal file to contend that a sum of Rs.38,231.85 (say Rs.38,232/-) was due from the complainant/ respondent towards ground rent and interest on late payments.  His contention is that he has not paid any ground rent for the last 22 years and, therefore, he has been charged interest only @ 12% per annum, though it could be recovered from him @ 15% or 24%.  The calculations (Annexure C-3), however, show that earlier it had been calculated @ 24% per annum.  It is not understood as to why the interest rate is shown to be 12% in the fresh calculation.  It rather shows that all is not well in the accounts wing of the appellant/ board and they can increase or decrease the interest and penalty according to their whims at any stage they like.  It is only due to this reason that the appellants were demanding Rs.66,122/- even on 14.5.2007 though the amount deposited till then would have been in excess of that due from the complainant.  This by itself amounts to deficiency in service on the part of the OP/appellant.

12.             The ld. District Forum has also referred to the 1979 regulations and observed that clause 4 authorising the Board to charge interest upto 24% per annum came into being only from 22.7.1993 and, therefore, interest in excess of that could not be charged prior to that date.  In fact the interest on the monthly instalments was being charged at a higher rate but now in the appeal the OP has mentioned that they have charged the complainant @ 10% per annum. As regards the ground rent they could charge @ 24% but have now alleged in the appeal that they have charged only @ 12% per annum.  The charging of interest @ 24% per annum was, therefore, not justified. 

13.             The ld. District Forum has also held that a notice was to be served on the complainant/respondent in case any instalment was not paid by the due date as required under sub rule 4 of Rule 4 of the 1979 regulations. The contention of the ld. Counsel for the appellant on the other hand is that in fact it would apply only in those cases where there was no agreement between the parties.  He has referred to clause 7 of the allotment letter (Annexure C-1) which provides that the allottee shall pay a monthly instalment of Rs.992/- without receipt of any notice to this effect.  It is further provided that if any instalment is not paid in full by the stipulated date, without prejudice to any other right or remedy of the Board, the allottee shall be liable to pay liquidated damages at the rates mentioned therein.  There is no mention of serving of any notice on the allottee before levying the penalty or interest on him.  The parties shall be governed in this respect by clause 7 of the allotment letter and not by regulation 4(4) of the aforesaid 1979 regulations.

14.             The ld. Counsel for the appellant has also argued that the penalty of Rs.30,000/- has been imposed on the OP/board in addition to the interest which is not permissible under the law. We do not find any merit in this contention. A perusal of the order shows that the OP were liable to pay the amount within six weeks from the date of receipt of certified copy of the order without payment of any interest.  The interest is payable only if even in spite of receipt of the certified copy of the order they did not pay the amount within six weeks.  Otherwise also, the appellant/board is not going to suffer any loss.  Needless to mention that they caused physical and mental harassment to the respondent/complainant by demanding the amount which was not due from him.  They did not update their accounts for 20 years. They have been showing the excess amount  separately instead of adjusting the same in the next instalment and calculating the amount due after every instalment paid by the complainant or at least yearly.  There was total inaction and non application of mind on the part of the Board employees. They woke up only when the complainant/respondent asked for the no due certificate but even then they tried to linger on the matter till he applied for information under the RTI Act.  The imposition of Rs.30,000/- is, therefore, fully justified under the facts and circumstances of the case.  Since this payment is to be made by the OP/appellant due to the negligence of the concerned employee(s), appellant is at liberty to recover the said amount from the concerned employee(s) after serving a notice on him/her/them to show cause as to why the same should not be recovered if they so desire.

15.             The ld. District Forum came to the conclusion that a sum of Rs.70,660/- has been recovered in excess from the complainant.  We have, however, perused the record and in view of the revised calculations submitted by the appellant in para 7 of the appeal to which we agree, a sum of Rs.44,100.24 (say Rs.44,100/-) has been recovered in excess. The OP/appellant is, therefore, liable to refund the said amount to the complainant.

16.             In view of the above discussion, we are of the opinion that the amount to be refunded by the OP/appellant would be Rs.44,100/- and not Rs.70,660/-.  In para 5 of the impugned judgment the amount to be paid by the complainant would be Rs.74,100/- and not Rs.1,00,660/-.  With this modification in the impugned order the appeal filed by the appellant is dismissed. The appellant shall pay Rs.5,000/- as costs of litigation to the complainant/respondent

                    Copies of this order be sent to the parties free of charge.

Pronounced.

12^th October, 2010.

Sd/-

[JUSTICE PRITAM PAL]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER

hg

STATE COMMISSION

(F.A. NO. 5 OF 2010)

Argued by:          Sh. K.K. Gupta, Advocate for the Appellant.

                    Sh. Munish Jolly, Advocate for Respondent.

Dated the 12^th day of October, 2010.

ORDER

                    Vide our detailed order of even date recorded separately, the appeal has been dismissed with cost of Rs.5,000/-.

(JAGROOP SINGH MAHAL)         (JUSTICE PRITAM PAL)       (NEENA SAHDHU)

                MEMBER                                  PRESIDENT                       MEMBER