DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

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The Sargodha Cooperative House Building (1^st) Society Ltd., through its President, H.No.1116, Sector 8-C, Chandigarh.

…..Complainant

                                      V E R S U S

1.       The Chandigarh Housing Board, Chandigarh, through its Chairman, Sector 9, Chandigarh.

2.       The Regular Cooperative Societies, U.T., Chandigarh, Sector 17, Chandigarh.

……Opposite Parties

QUORUM:   P.L.AHUJA                                                  PRESIDENT

                   RAJINDER SINGH GILL                                MEMBER

                   DR.(MRS) MADANJIT KAUR SAHOTA         MEMBER

Argued by: Sh.S.S.Khetarpal, Counsel for the complainant.

                     Sh.Rajiv Sharma, Counsel for OP No.1.

                     Sh.Jatinder Singh, Govt. Pleader for OP No.2.

PER P.L.AHUJA, PRESIDENT

1.                The Sargodha Cooperative House Building (1st) Society Ltd., complainant has filed this consumer complaint under Section 12 of the Consumer Protection Act, 1986, against the Chandigarh Housing Board & Anr. - Opposite Parties (hereinafter called the OPs), in which, the following relief has been claimed :-

“The Chandigarh Housing Board be directed to refund the amount of Rs.6,84,273/- retained illegally by it in respect of 42 members of the society with interest @8% p.a. thereon from the date of deposit of balance 15% alongwith interest @18%. The amount of interest @8% per annum on Rs.6,84,273/- upto 31.12.2011 comes about Rs.7,59,100/-.

          The Chandigarh Housing Board may also be directed to pay Rs.20,000/- as cost of litigation and also to pay compensation to the tune of Rs.30,000/- for harassment and mental agony to which 42 members have been subjected for 11-13 years.”

2.                The brief facts of the complaint are that the Chandigarh Administration framed a scheme namely the Chandigarh Allotment of Land to the Cooperative Societies Scheme 1991, which was notified on 28.5.1991 for allotment of land to the Cooperative Societies for construction of dwelling for flats for the members of the societies. Under the said scheme, the Chandigarh Housing Board demanded 25% of the price of land @750 per sq. yard from the members through the society. Some of the Cooperative Societies challenged the 1991 Scheme through C.W.P.No.1454/92 in the Hon’ble Punjab and Haryana High Court on various grounds, one of the grounds being that only 10% of the price of land be charged as earnest money instead of 25%. The Hon’ble Punjab and Haryana High Court passed an interim order on 11.5.1992 for payment of 10% earnest money with the application and remaining 15% to be paid with interest @ 18% p.a. after final disposal of C.W.P.No.1454/92. In terms of order dated 11.5.1992, the complainant society deposited 10% of the price of land as earnest money in respect of its members. C.W.P.No.1454/92 was finally dismissed on 18.12.1996 and the complainant society deposited the remaining 15% of the price of the land to make the earnest money as 25% with interest @ 18% for the period from 1.6.1992 to 18.12.1996 on 10.2.1998. The copy of the letter dated 10.2.1998 from the complainant to Chandigarh Housing Board along with enclosures is Annexure C-1. The Chandigarh Administration/ Chandigarh Housing Board enhanced the price of land from Rs.750/- per sq. yard to Rs.2500/- per sq. yard and required the society to deposit the difference of 25% earnest money as at enhanced rates. The difference of 25% earnest money at enhanced rates worked out category wise as under :-

a.   For members belonging “A” Category              Rs.84,700/-

b.   For members belonging “B” Category               Rs.60,502/-

c.   For members belonging “C” Category               Rs.47,049/-

3.                It has been contended that the members of the society were wrongly asked to deposit difference as indicated above. 42 members of the society expressed their inability to deposit the difference of 25% earnest money at enhanced rate and pulled themselves out of the membership of the society as no land had been allotted by then. Those members requested for refund of the amount deposited with Chandigarh Housing Board through the society. The complainant society approached Chandigarh Housing Board vide its letter dated 2.8.2000 – Annexure C-2 for refund of the entire amount deposited by 42 members through the complainant society. The Chandigarh Housing Board refunded the amount of earnest money of 25% only in respect of 42 members vide its letter No.HB-CAO-SO-111(A-3)/2K/98 dated 5.1.2001 – Annexure C-3 and forwarded a cheque of Rs.12,69,027/- on account of refund of the members but retained the amount of interest deposited by the members. According to the complainant, the amount of interest retained by the Chandigarh Housing Board in respect of 42 members is as under :-

i)        Amount of interest retained for each member       Rs.19,817/- belonging to “A” category (Total 19      members).

ii)       Amount of interest retained for each member       Rs.13,802/- belonging to “B” category (Total 20      members).

iii)      Amount of interest retained for each member       Rs.10,570/- belonging to “C” category (Total 3        members).

4.                The complainant society after the refund of 25% earnest money of the members wrote to the Chandigarh Housing Board vide letter – Annexure C-4 that it had reserved its right to get refund of the balance amount with interest @ 18% p.a. In similar cases many complaints were filed before the District Fora for refund of amount of interest retained by the Chandigarh Housing Board illegally and complaints were allowed by the District Fora directing the Chandigarh Housing Board to refund the amount of interest retained by it with interest @ 18% from the date of refund of earnest money. The Chandigarh Housing Board challenged the said orders of District Fora in appeals before the Hon’ble State Commission, U.T., Chandigarh, who upheld the order of the District Foras. However, the orders were modified to the extent that instead of 18% p.a. the amount of interest retained by the Chandigarh Housing Board was ordered to be refunded with interest @ 8% p.a. from the date of deposit of the amount. Chandigarh Housing Board filed revision petitions in similar cases before the Hon’ble National Commission, who dismissed the same on 12.7.2007 and directed the Chandigarh Housing Board to refund the amount of interest retained by it along with interest @ 8% p.a. from the date of deposit. Hon’ble National Commission also directed that Chandigarh Housing Board shall pay Rs.3500/- to each of complainants as cost of litigation.  The copy of order dated 12.7.2007 is Annexure C-6. Chandigarh Housing Board thereafter filed 25 SLPs, the main SLP bearing No.21740 of 2007 in Avtar Singh’s case and the Hon’ble Supreme Court vide its detailed judgment dated 22.9.2010 – Annexure C-7 dismissed all the 25 SLPs and also directed Chandigarh Housing Board to refund the amount due to the complainants and to pay cost of Rs.25,000/- to each of the complainant.

5.                The complainant has alleged that its case is fully covered by the judgment dated 22.9.2010 and the 42 members are entitled to refund of the amount deposited by each, which has been illegally retained by the Chandigarh Housing Board along with interest @8% p.a. from the date of deposit of the amount i.e. 19.2.1998. It has been alleged that inaction on the part of Chandigarh Housing Board to refund the amount of interest constitutes deficiency in service on its part.  Earlier a complaint bearing No.122/2011 was filed before this Forum and when it came up for hearing on 28.4.2011 a statement was made by the Counsel for the Chandigarh Housing Board that the complainant had not approached the Chandigarh Housing Board after the decision of the Hon’ble Supreme Court. The complaint was withdrawn for seeking appropriate relief from Chandigarh Housing Board with liberty to file fresh complaint. The Chandigarh Housing Board was requested by the complainant society on 5.5.2011 vide letter – Annexure C-8 for refund of the amount in respect of 42 members with interest @ 8% from the date of deposit till actual payment. According to the complainant, the amount of interest @ 8% came to Rs.7,28,522/- upto 31.5.2011. Since Chandigarh Housing Board did not give any reply even after lapse of about 7 months on the representation, the complainant was compelled to file the present complaint.

6.                OP No.1 has pleaded in its amended reply filed by Mr.M.M.Sabharwal, Secretary that there is no deficiency on its part as the board has acted as per instructions issued by the Finance Department dated 9.3.2000 and 13.6.2000 vide which, it was categorically stated to refund 25% earnest money and not the 18% interest so deposited willingly by the members of the society as per the directions of the Hon’ble High Court of Punjab and Haryana.  Instructions of the Finance Department are Annexure R-1 and R-2. It has been averred that the complainant is not entitled for the interest of 8% as there is no such order of this Forum in this case. It has been stated that the request for refund of interest of non allottee members of the society was received by the board and the matter was put up before the Finance Secretary, U.T., Chandigarh vide letter dated 25.7.2011 – Annexure R-3, therefore, no reply to the request/representation was sent to the society. On 28.9.2011 approval was received from the Finance Department, U.T., Chandigarh and the process of calculation of the refund of various societies started. A meeting of the Board of Chandigarh Housing Board was held on 5.12.2011 and with due deliberations it was decided to refund the 18% interest amount @8% or the actual interest accrued on the FDRs, whichever is less, as the accrued interest was 8.74% and after deduction of Income Tax @2.70% and 1% handling charges the rate comes to 5.04% respectively to 2530 non petitioners. Resultantly a cheque of a consolidated amount of Rs.13,81,252/- dated 23.1.2012 was issued and sent to the President of the society for 55 members (42 petitioners in this case + 13 other non petitioners). Copy of minutes of the Board meeting held on 5.12.2011 is Annexure R-4. In its meeting held on 16.3.2012 it was resolved that no interest is to be paid to the members of the societies as the order of the Hon’ble Apex Court does not impose such interest to be paid, who were non petitioners or petitioners and further it was resolved to recover the excess amount paid by the board by way of 5% interest. Copy of minutes of the board meeting held on 16.3.2012 is Annexure R-7. The Finance Department had conveyed its decision to the board on 28.9.2011, which is Annexure R-5.

7.                OP No.2 in its written statement has simply pleaded that the complainant society is registered with it.

8.                The parties led evidence in support of their contentions.

9.                We have gone through the entire evidence on record and heard the arguments addressed by the learned Counsel for the complainant & OP No.1 and Govt. Pleader for OP No.2.

10.              The most material question for determination in this case is whether the complainant is entitled to the refund of the amount of Rs.6,84,273/- in respect of 42 members of the society with interest @ 8% p.a. from the date of deposit of the balance, as already decided in similar complaints filed before the District Fora.

11.              It has been urged by the learned Counsel for the complainant that the Hon’ble Supreme Court in Chandigarh Housing Board Vs. Avtar Singh and others JT 2010(10) SC 360 – Annexure C-7 has clearly held that Chandigarh Administration and the board were not justified in refusing to refund 18% interest paid by the members of the societies. The order passed by the Hon’ble State Commission, UT, Chandigarh dated 2.12.2003, copy of which is Annexure    C-5, whereby, apart from refunding the amount of the complainant, interest @8% p.a. from the date of payment was affirmed by the Hon’ble National Commission on 12.7.2007, copy of which is Annexure C-6. The learned Counsel for the complainant has strenuously argued that the Hon’ble Supreme Court had dismissed all the 25 appeals filed by the Chandigarh Housing Board and Chandigarh Housing Board was directed to refund the amount due to the complainants with litigation cost of Rs.25,000/- to each of the complainants. He has argued that earlier a complaint No.122 of 2011 was filed by the complainant of this case and the learned Counsel for Chandigarh Housing Board made a statement that the complainant had not approached Chandigarh Housing Board after the decision of the Hon’ble Supreme Court. Therefore, that complaint was withdrawn for seeking appropriate relief from Chandigarh Housing Board with liberty to file a fresh complaint in case appropriate relief is not given by the Chandigarh Housing Board. He has contended that a representation was made by the President of the society on 5.5.2011, copy of which is Annexure C-8 to the Chairman, Chandigarh Housing Board but Chandigarh Housing Board did not give any reply even after a lapse of about 7 months and such an inaction on the part of OP No.1 constitutes a deficiency in service. He has further argued that the deliberations of Chandigarh Housing Board on 5.12.2011 – Annexure R-4 and subsequent deliberations on 16.3.2012 have no relevance at all and the Chandigarh Housing Board was bound to give a reply to the representation filed by the complainant society. He has argued that the OP No.1 has not granted 8% interest on the refund of 18% interest amount in terms of judgment dated 22.9.2010 of the Hon’ble Supreme Court in similar cases and allowed only 5% interest on refund, which was returned to the Counsel for OP No.1 on 30.1.2012. The learned Counsel for the complainant has also contended that the meeting dated 16.3.2012, minutes of which are Annexure   R-7 was held much after the filing of the complaint and it has no relevance to the facts of the present case. The learned Counsel for the complainant has fervently pleaded that there is clear evidence of deficiency in service on the part of OP No.1 and the complainant is entitled to the relief claimed by it.

12.              On the other hand, the learned Counsel for OP No.1 has urged that the complainant is not entitled for the interest of 8% as there is no such order of this Forum. He has argued that the request for the refund of interest of non allottee members of the society was received by the board and the matter was put up before the Finance Secretary, UT, Chandigarh vide letter dated 25.7.2011 – Annexure R-3, therefore, no reply was sent to the complainant society in respect of its representation. The approval was received from Finance Department, UT, Chandigarh on 28.9.2011 and, thereafter, a meeting of the Chandigarh Housing Board was held on 5.12.2011 and it was decided to refund 18% interest amount @ 8% or the actual interest accrued on the FDRs, whichever is less, as the accrued interest was 8.74% and after deduction of Income Tax @2.70% and 1% handling charges the rate comes to 5.04% respectively. The minutes of the board meeting held on 5.12.2011 is Annexure R-4. Thereafter a cheque of Rs.13,81,252/- dated 23.1.2012 was issued and sent to the President of the society of 55 members (42 petitioners in this case + 13 other non petitioners) but the said cheque was returned by the complainant to the Counsel for OP No.1 on 30.1.2012. He has further argued that the board had held a meeting on 16.3.2012, minutes of which are Annexure R-7, by which it was resolved that no interest is to be paid to the members of the society as the order of the Hon’ble Apex Court does not impose such interest on OP No.1 to be paid to the members of the societies, who were non petitioners or petitioners and further it was resolved to recover the excess amount paid by the board by way of 5% interest. He has argued that there was no inaction on the part of OP No.1 and there were no compelling circumstances available to the complainant for filing the present complaint.

13.                 We have carefully considered the rival contentions. We are of the view that when in similar complaints, the District Fora had passed orders on the complaints directing Chandigarh Housing Board to refund the amount of interest retained by it with interest @18% from the date of refund of earnest money and the Hon’ble State Commission upheld that order but modified it and that order was upheld even by the Hon’ble Supreme Court in Chandigarh Housing Board Vs. Avtar Singh and others case (supra), the complainant society was entitled to the refund of the amount of Rs.6,84,272/- retained by OP No.1 in respect of 42 members of the society with interest @8% p.a. from the date of deposit. Even though, the complainant filed a representation with OP No.1 on 5.5.2011 – Annexure C-8, yet the OP No.1 did not grant the above relief and did not send any reply to that representation therefore, such an inaction on the part of OP No.1 amounts to deficiency in service. Even if, the complainant had not filed a complaint earlier, when similar complaints were filed by other complainants, in view of the order passed by the Hon’ble Supreme Court in Chandigarh Housing Board Vs. Avtar Singh and others, OP No.1 had no right to refuse refund of interest to the complainant along with interest as no land was allotted to 42 members of the complainant society.

14.              As far as the contention that a cheque of Rs.13,81,252/- was sent to the complainant society on account of the refund of retained 18% interest along with interest on 23.1.2012 is concerned, a perusal of the Annexure to the letter dated 23.1.2012 sent by OP No.1 to the complainant shows that the interest on the retained 18% interest amount was calculated @5% w.e.f. 16.7.2000 to 31.1.2012 instead of 8% p.a. as affirmed by the Hon’ble Supreme Court. Thus, we feel that the action of complainant in returning the said cheque of Rs.13,81,252/- to OP No.1 on 30.1.2012 was not unjustified. As far as the decisions taken in the meetings held on 5.12.2011 and 16.3.2012 are concerned, since as per the order affirmed by the Hon’ble Supreme Court, the complainant society was entitled to interest @8% p.a. on the 18% interest, the deliberations to reduce that interest are not binding particularly when the same were taken after the filing of the present complaint. We are of the opinion that the circumstances point out deficiency in service on the part of OP No.1. The complainant is entitled to the refund of the amount of Rs.6,84,273/- retained by OP No.1 in respect of 42 members of the society along with interest @8% p.a. from the date of deposit of balance 15% till realization of the amount.

15.              For the reasons recorded above, the complaint is allowed. OP No.1 is directed :-

i)                 To refund the amount of Rs.6,84,273/- along with interest @8% p.a. to the complainant from the date of deposit till realization.

ii)                To pay an amount of Rs.30,000/- for harassment and mental agony to the 42 members.

iii)                To pay an amount of Rs.11,000/- to the complainant towards costs of litigation.

16.              This order shall be complied with by OP No.1 within one month from the date of receipt of its certified copy, failing which, OP No.1 shall be liable to refund the above said awarded amount to the complainant along with penal interest @ 12% p.a. since the date of filing of the present complaint, till its actual payment to the complainant.

17.              The certified copies of this order be sent to the parties free of charge. The file be consigned.