MRS. NEENA SANDHU, MEMBER

1.         This is an appeal filed by the appellant/complainant against the order, dated 14.7.2010 passed by District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as District Forum only) in complaint case No. 1525 of 2009 vide which, it dismissed the complaint. 

2.         Briefly stated, the facts of the case, are that the complainant was a member of the Bank of India Employees Cooperative H/B Society Limited and he was allotted flat no. 2259, Star Enclave, Sector 48, Chandigarh.  The complainant had already paid a sum of Rs.4,76,000/- as full and final payment of the cost of land prior to the allotment of flat and a sum of Rs.7,95,000/- towards the cost of construction against a total cost of construction of Rs.8,25,000/-.  It was stated that the rate of interest charged from the complainant upto November, 2004, was 12% on the delayed payment of construction. However, after the allotment of flats, interest @ 18% p.a. had been levied on the delayed payment made by the complainant, for the same period. It was further stated that the complainant approached the OPs a number of times, with a request, not to charge interest @ 18% p.a. but they never bothered to accede to the request of the complainant. It was further stated that aggrieved by the arbitrary and unfair action of the OPs, the complainant was compelled to approach the Registrar, Cooperative Societies, UT, Chandigarh, who vide his letter dated 27.11.2006 directed the society not to charge interest beyond 12% p.a. w.e.f. 23.4.2004 but the society had not taken any action on the above said letter. Even the OPs were not giving the possession of the said flat to the complainant, whereas, the abovesaid flat was misused by the society. It was further stated that the OPs knowingly, intentionally and with malafide intention did not supply the required information to the bank, in time, as a result whereof, the loan was not disbursed by the bank to the complainant. The complainant sent a legal notice dated 25.2.2009 to the OPs, and they gave a vague reply after distorting the true facts. It was further stated that the abovesaid acts of the OPs, amounted to deficiency, in service, and indulgence into unfair trade practice. Hence, the complaint was filed.

3.         Reply was filed by the OPs, wherein, it was stated that the complainant was well aware about the Rules of the OP Society, that the possession of the allotted flat was to be taken within one month from the date of allotment and, thereafter, Rs.1,000/- per month were to be charged from the allottee.  It was further stated that the maximum period for taking possession of the flat was 3 months from the date of allotment, failing which, the necessary action including cancellation of the same was to be taken as per the bylaws/rules & regulations, scheme of allotment and the Rules notified by the Chandigarh Housing Board and the Chandigarh Administration, as also the instructions issued by them. It was further stated that the case of the complainant could only be considered if he had deposited the amount of Rs.4,37,118.52 paise due against him as on 31.3.2008, alongwith interest and other expenses. It was further stated that the construction cost was to be paid by him, but he did not bother, despite repeated requests & communications. Therefore, the complainant was also liable to pay interest @ 20% p.a., which the Chandigarh Housing Board was charging from the Society. It was further stated the complainant was willful defaulter from April 2003 to May, 2005 in regard to the payment of cost of construction through the said flat was allotted to him in January, 2005. Till date the complainant had not paid even a single penny and had asked for documents for applying for loan on 26.2.2005.  It was further stated, as per the direction of the Assistant Registrar Cooperative Societies, the possession of the flat could not be given to him.  All other allegations, levelled by the complainant, in the complaint, were denied. It was further stated that there was no deficiency, in service, on the part of the OPs nor they indulged into unfair trade practice.

4.         The parties led evidence, in support of their case.

5.       The learned District Forum, dismissed the complaint, in the manner, referred to, in the opening para of the order.  

6.            Aggrieved by the order, passed by the learned District Forum, the appellant/complainant, has filed the instant appeal. 

7.         We have heard Sh.T.S.Chauhan, Advocate for the appellant/complainant, Sh.Inder Singh & Sh.Neelam Singh, Advocates, for the respondents/OPs and, have perused the record alongwith the written arguments filed by both the parties, carefully.

8.       The learned Counsel for the appellant/complainant contended that the cost of construction of the flat was Rs.8,25,000/- , out of which the complainant had deposited Rs.7,95,000/- and a balance of only Rs.30,000/- remained to be paid. It was further contended that the complainant is ready to pay the outstanding amount with interest @ 12% as per the directions issued by the Additional Registrar Cooperative Societies, UT, Chandigarh (Annexure C-5) whereas, the OPs have demanded compound interest @ 18% p.a., on the outstanding amount.  It was further contended that as per the order passed under Rule 45 of the Punjab Cooperative Societies Rules 1963 (as applicable to UT, Chandigarh), all the Cooperative House Building Societies are required to charge interest @ 12% p.a., on the dues, to be paid by the defaulted members with immediate effect (on delayed payment for the successful conduct of business of these societies). It was further contended that the abovesaid standing order was never challenged/questioned by the OPs. Moreover Rule 45 has been upheld by the Division Bench of Punjab and Haryana High Court in 1985 RRR 277 – Bakshish Singh Vs. The Registrar Cooperative Societies, Punjab. It was further contended that the OPs without any justification and without affording any opportunity of hearing to the complainant enhanced the rate of interest from 12% p.a. to @ 18% p.a. (compounding). The complainant made repeated requests to the OPs to allow him to deposit the amount with interest @ 12% p.a., but all in vain. The complainant also served a legal notice, and, ultimately, he filed a complaint, which was dismissed on 14.7.2010. It was further contended that while dismissing the complaint, the learned District Forum, failed to appreciate the difference between the cost of land and cost of construction. Moreover, the learned District Forum wrongly relied upon Annexure R-6 placed on record by the OP society, which is a letter dated 2.6.2006 written by the Society to the Registrar sending comments on the representation dated 24.4.2006 Annexure C-4 made by the appellant/complainant, to the Registrar against charging interest @ 18% p.a. (compounding) instead of 12% (simple) contrary to the directions of the Registrar.  He further contended that the learned District Forum further failed to appreciate that the Registrar vide order dated 27.11.2006 (Annexure C-5) after appreciating the representation dated 24.4.2006 (Annexure C-4) of the appellant/complainant and appreciating the comments dated 2.6.2006 (Annexure C-6) of the respondents/OPs society directed the OP society to charge interest @ 12% p.a. (simple) from the appellant. Therefore, the whole reliance of the District Forum on Annexure R-6 was wrong and unsustainable.   It was further contended that in fact one member died and to meet the cost of construction of his flat, Rs.39,000/- were taken from each member of the society . After its completion the said flat was sold in the open market on prevalent market rates and out of that amount Rs.39,000/- were refunded to each member with simple interest @ 4% p.a. and the remaining amount was embezzled by the President & Secretary of the OPs society. It was further contended that it was wrongly held by the learned District Forum that the appellant could not mortgage the flat with the bank, or any other financial institution, for raising the loan, whereas as per Clause 15 of the loan allotment letter dated 24.1.2002 the society or its member may, with the previous consent, in writing of the Estate Officer, mortgage the site in favour of the Central Government, State Government, Chandigarh Administration, Life Insurance Corporation of India or any scheduled Bank/financial institution for securing loans for the construction of the dwelling units. Hence, the impugned order passed by the learned District Forum is based, on conjectures, surmises, imagination and supposition and is liable to be set aside.

9.         The learned Counsel for the respondents/OPs contended that flat No.2259, 1^st Floor, in the Bank of India Cooperative House Building Society Ltd. was allotted to the complainant, for which he had paid a sum of Rs.4,76,000/- towards the cost of land and Rs.7,95,000/- against the total cost of construction of Rs.8,25,000/-. It was further contended that the society had rightly asked him to pay an interest @ 18% p.a. on the delayed payment i.e. Rs.4,37,118.52 paise as on 31.3.2008 but this amount was still outstanding as the same had not been paid by the complainant. It was further contended that the complainant is defaulter in making the payments from the very beginning, as is evident from Annexure C-1 and C-3, as the complainant paid a total amount of Rs.11,21,176/- against the total price Rs.14,95,642.52 paise whereas he was required to pay the balance amount of Rs.3,74,466.52 paise as on 30.9.2005  plus upto date interest. Therefore, before handing over possession to the appellant/complainant the society demanded Rs.4,37,118.52 paise due as on 31.3.2008 alongwith interest. The complainant was also liable to pay further interest w.e.f. 1.4.2008 till date.   It was further contended that the cost of construction of the flat of the complainant had been shared by the other members of the Society, as he did not make the due payment and the OPs had paid commercial rate of interest on compounding basis, on the amount, which was taken as a loan from the members of the society by them. It was further contended that as far as the rate of interest was concerned, it was pertinent to mention that the Chandigarh Housing Board, after the allotment of land, to the society was charging 20% interest p.a.on defaulted/late deposit of the amount from the society, collected from the members and they (members) were paying commercial rate of interest on monthly compounding basis which comes to around 22% p.a. It was further contended that the flat was allotted to the complainant on 10.3.2005, but till that date, he did not pay even a single penny for the cost of construction. Therefore, it was unanimously decided on 19.3.2006 by the members of the society, to charge interest @ 18% alongwith penalty, if any.  It was further contended that the documents which were needed by the complainant to supply for loan from the bank were not supplied by the OPs because he had failed to pay the defaulted amount. The possession of the flat could not be given as the Assistant Registrar Cooperative Society issued direction to the Society that the possession should only be handed over to the allottees subject to the clearance of all the dues. He further submitted that the impugned order is legal and valid.

10.       After giving thoughtful consideration to the rival contentions, advanced by the Counsel for the parties, we have come to the conclusion that there is no deficiency in service and indulgence into unfair trade practice, on the part of OPs. Rather the complainant was at fault as he did not make payment of the due amount of the cost of construction, and the OPs have rightly charged interest @ 18% on the due amount because as per letter Annexure R-1, the Chandigarh Housing Board, after allotment to the society, was charging interest @ 20% p.a. on defaulted/late deposit of the amount from it, collected from the members and they (members) are paying commercial rate of interest on monthly compoundable basis, which comes around 22%.  Moreover, the OPs are justified in charging interest @ 18% p.a. on the defaulted payment, from the complainant, because the cost of construction, which was to be paid by him, was shared by the members of the Society and the society had paid compound commercial rate of interest to the contributing members.

11.            Moreover we do not find any force, in the arguments, put forth by the learned Counsel of the complainant that as per Annexure C-5 a letter written by the Additional Registrar Cooperative Societies, UT, Chandigarh to the President/Secretary of OP No.1 it could charge inerest @ 12% p.a. C-5 reads as under.

“ii) To charge interest on cost of land as calculated by Chandigarh Housing Board and to charge 12% interest on construction cost w.e.f. 23.4.2004, before 23.4.2004 interest on construction cost be charged as per resolution passed by the Managing Committee from time to time from Sh.Deepak Kumar Chandel. “

The perusal of Annexure C-1 the statement of account shows that the complainant is defaulter from the very beginning in making the payments and the OPs have rightly charged interest @ 18% on the two late payments as both the payments are before 23.4.2004. There is only one defaulted payment after 23.4.2004 on which the OPs have charged interest @ 18% p.a. that too they have charged rightly because the Chandigarh Housing Board was charging 20% p.a. rate of interest on the defaulted/late deposit of amount, from the society as per Annexure R-1. Moreover, the society has also paid a commercial rate of interest to the members of the society, who have shared the cost of construction, which was to be borne by the complainant.

12.       The allegation of the complainant is also baseless that the OPs have refused to supply the required documents, which were necessary for applying for loan. The OPs could not issue the No Due Certificate to the complainant, as he did not make the total payment of the flat. As such, the possession of the flat could not be given to him, because the Assistant Registrar Cooperative Societies issued a direction to the Society vide Annexure R-2, that the possession should only be handed over to the allottees, subject to the clearance of all the dues.

13.       For these reasons detailed above, we do not find any ground, to interfere with the impugned order. Consequently, the appeal stands dismissed with no order as to costs and the order passed by the learned District Forum is upheld.

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

Pronounced.                                                                        

6^th July, 2011.