1.       This appeal has been filed under section 19 of the Act 1986 in challenge to the Order dated 05.11.2018 of the State Commission in complaint no. 315 of 2018.

2.       We have heard the learned counsel for the appellant (the ‘development authority’) and the learned counsel for the respondent (the ‘complainant’) and have perused the record.

3.       The appeal has been filed with self-admitted delay of 177 days. 

Learned counsel for the development authority draws attention to the reasons contained in the application for condonation of delay and requests that the delay be condoned.

Learned counsel for the complainant does not oppose, submitting that he would prefer putting a period to the lis by a decision on merits. 

In the interest of justice, considering the reasons mentioned in the application for condonation of delay, as also considering the submissions made by the learned counsel, and in order to decide the matter on merits rather than dismissing it on the threshold of limitation, the delay is being condoned. 

4.       Brief relevant facts, as evince from a reading of the complaint, the written version and the appraisal made by the State Commission, are that the complainant had applied on 12.01.2012 to the development authority for a residential flat. The total consideration amount was Rs. 69,00,000/-. On 12.01.2012 itself, along with his application, he also deposited an amount of Rs. 6,90,000/- as earnest money, being 10% of the consideration amount. The scheme in question was over-subscribed. Consequently allotment was made by draw of lots, in which the complainant was successful. He deposited a second instalment of Rs.13,80,000/-, being 20% of the consideration amount, within the stipulated time period, vide a bank draft dated 11.06.2012. The development authority, however, for reasons best known to itself and not known to anyone else yet, did not acknowledge receipt of the said amount and cancelled the allotment on ground that the terms and conditions of allotment had not been adhered to. It refunded the earnest money of Rs. 6,90,000/- after making a deduction of 10% i.e. Rs. 69,000/-. The complainant was aggrieved with both, not acknowledging receipt of the amount of Rs. 13,80,000/- deposited by him and the unfounded wrongful cancellation of his allotment. He continuously pursued the matter with the development authority, he had to inter alia take recourse to filing representations with the development authority, filing complaint with the police, seeking information under the RTI Act and filing appeal before the appellate authority. After about six years the development authority finally acknowledged that in fact the complainant had actually paid the said amount of Rs. 13,80,000/- in 2012 and refunded the same vide a cheque dated 19.02.2018. The complainant went before the State Commission on 23.04.2018, seeking revival of his allotment or in the alternative compensation by way of interest at the rate of 18% per annum on the total deposited amount of Rs. 20,70,000/- (Rs. 6,90,000/- + Rs. 13,80,000/-) from the respective dates of deposit till 19.02.2018 (the date of the cheque vide which the amount of Rs. 13,80,000/- was finally refunded) along with lumpsum Rs. 5,00,000/- as compensation for harassment and wrongful cancellation of his allotment without his consent and against the provisions of the letter of intent.

5.       The State Commission allowed the complaint on contest. It awarded interest at the rate of 8% compounded annually on the total deposited amount of Rs. 20,70,000/- from the respective dates of deposit till realisation along with refund of the amount of Rs. 69,000/- deducted from the earnest money as also lumpsum Rs. 30,000/- as compensation for mental agony and harassment inclusive of litigation expenses. It also stipulated that the compliance be made within 30 days failing which the amount of Rs. 30,000/- shall carry interest at the rate of 12% per annum from the date of its Order.

6.       We notice that the State Commission has passed a well-appraised and reasoned Order and has aptly dealt with the issues germane to the dispute.

7.       The State Commission has considered and dismissed the preliminary objection regarding the complainant not being ‘consumer’ under the Act 1986 (para 10 of its Order). It has rightly observed that “In this regard, it is relevant to mention that there is no evidence from the side of the opposite party to prove that the complainant is indulging in sale purchase of property for commercial purpose and simple assertion in this regard in the reply of the opposite party is not sufficient to prove this fact.- - - In the instant case also, as already said above, there is no evidence led by the opposite party to prove that the complainant indulged in sale purchase of properties and that he purchased the unit, in question, for further sale or for earning profits. Accordingly, the above said objection /contention of the opposite party is rejected and the complainant is held to be ‘consumer’, under the Act.”.

The onus to substantiate its assertion that the complainant had availed of its services for ‘commercial purpose’ was on the development authority, which onus it miserably failed to discharge, no worthwhile convincing evidence to support its assertion was ever led by the development authority. Admittedly the unit in question was a residential flat, and not per se a commercial unit. Also, admittedly, the development authority had accepted part consideration for the unit. As such the complainant was undoubtedly ‘consumer’ within the meaning of section 2(1)(d)(ii) of the Act 1986, with no substantial or convincing or persuasive material to hold to the contrary.

8.       The State Commission has also dismissed another preliminary objection that “complicated” questions of fact and law were involved and therefore the State Commission did not have the “jurisdiction” to entertain the complaint. The State Commission has rightly observed in para 11 of its Order that “In case we go through the pleadings of the parties, the complainant had booked one apartment with the opposite party and had paid a sum of Rs. 20,70,000/- as demanded by the opposite party. LOI has been issued to the complainant and as per the terms the opposite party was to deliver the possession within 36 months from the date of issuance of LOI. It is only the interpretation of Letter of Intent and then to see whether there is any deficiency in service on the part of the OP? We do not see that any complicated questions of law and facts are involved, which cannot be adjudicated by this Commission.”.

We may observe that the matter essentially involved only one question of fact i.e. whether or not the complainant had actually deposited 20% of the consideration amount i.e. Rs. 13,80,000/- vide draft dated 11.06.2012. This was by no means an intricate question. This was not even a disputed question since the development authority had itself accepted the fact of the deposit actually having been made and had refunded the amount of Rs. 13,80,000/- on 19.02.2018 prior to the complaint being filed on 23.04.2018. And no such convoluted question of law is at all visible which may go to defy the prowess, ambit or competence of the concerned consumer protection commission to adjudicate the same. This was a straight and simple matter which could have been decided by the State Commission in the normal wont in the usual course. As such it was a frivolous objection taken by the development authority, raised more for the purpose of evading scrutiny by the State Commission rather than with any real substance inherent.

9.       The State Commission has dealt with the substantive dispute in paras 12 to 17 of its Order. The essence, as summarised in para 17 of its Order, is being reproduced below for reference:

17. In view of the above discussion, it is evident that opposite party i.e. GMADA, encashed the demand draft dated 11.06.2012 amounting to Rs. 13,80,000/- in their account but did not issued any receipt to the complainant and when the matter was escalated by the complainant, the opposite party refunded the amount vide cheque No.662472 dated 19.02.2018 for Rs. 13,80,000/- i.e. after about six years, vide their letter dated 06.03.2018, Ex. OP-15. The opposite party though pleaded in its reply that it was under the bonafide impression that the complainant had not paid balance 20% amount, cancelled the allotment as per the terms of the LOI and refunded the amount after deducting 10% of the EMD i.e. Rs. 69,000/- vide letter dated 19.12.2014. As the opposite party had already received 30% amount, therefore, they cannot cancel the allotment by taking the plea that the complainant has not paid the balance 20% amount. Therefore, the order passed by Estate Officer, Ex.OP-4 is against the terms and conditions of LOI. It is a deficiency on the part of the opposite party which resulted in harassment to the complainant. We are of the view that there is a lapse on the part of some official of the opposite party, against whom the disciplinary proceedings can be initiated to recover the loss.

10.     The amount of Rs. 13,80,000/- in question had been paid vide a bank draft i.e. it was not a cash transaction. A certificate from the banker certifying the encashment of the bank draft had also been produced by the complainant. That the said amount of Rs. 13,80,000/- had been duly deposited by the complainant and had been credited in the account of the development authority is a proven as well as admitted fact, the development authority has itself accepted this and refunded the said amount to the complainant vide cheque dated 19.02.2018. Significantly enough the refund was made before the complainant approached the State Commission i.e. the development authority detected its lapse before any judicial or quasi-judicial court or tribunal had become seized of the matter and it can therefore not be contended that the refund was made in spite of the development authority having a contrary stand or to avoid litigation etc.

11.     Even before us learned counsel for both sides admit that the said amount of Rs. 13,80,000/- was actually deposited by the complainant vide draft dated 11.06.2012 and was encashed by the development authority into its account. The submission is that the only question outstanding in the appeal is regarding the quantum of compensation awarded by the State Commission.  

12.     Learned counsel for the development authority contests the quantum of compensation. She submits that the compensation awarded by the State Commission by way of interest at the rate of 8% compounded annually on the deposited amount is unreasonable and unjust and on the higher side. According to the learned counsel this is just a case of refunding the complainant’s deposited amount after it was found that the same had actually been deposited and as such simple interest at the rate of 6% to 9% per annum on the deposited amount would be reasonable and just. Learned counsel further submits that in case the rate of interest as awarded by the State Commission is sustained it will set a bad precedent for other similar cases, to which the development authority cannot agree to. She also submits that the development authority is a government authority and “public money” is involved and therefore the compensation awarded necessarily ought to be minimized.

Learned counsel for the complainant in rebuttal defends the quantum of compensation. He draws attention to condition no. 3(II) in the letter of intent, which is being reproduced below for reference:

(II) Possession of apartment shall be handed over after completion of development works at site in a period of 36 months from the date of issuance of Letter of Intent. In case for any reason, the Authority is unable to deliver the possession of apartments within stipulated period, allottee shall have the right to withdraw from the scheme by moving an application to the Estate Officer, in which case, the Authority shall refund the entire amount deposited by the applicant along with 8% interest compounded annually. Apart from this, there shall be no other liability of the Authority.

Learned counsel submits that this condition provides for interest at the rate of 8% compounded annually in a case in which possession is not handed over by the development authority within the committed period. The present case however is much more serious since the allotment itself was wrongfully cancelled, 10% of the earnest money was wrongfully deducted and receipt of the amount of Rs. 13,80,000/- was even denied outright in the first instance. Only after the complainant continuously pursued the matter for about six years, the fact of the deposit having been made was at last accepted. But even then the refund was made without any interest. This is not a case of simple refund, as is being argued on behalf of the development authority, but a case of wrongful cancellation of allotment by not acknowledging receipt of the second instalment at the relevant time, and then refunding it after a most unreasonable protracted period and that too without any interest. Learned counsel emphasises that even in simple cases where the development authority is unable to deliver possession of the unit within the committed period it refunds the entire deposited amount with 8% interest compounded annually but here it is a case in which the right of allotment itself was snatched by a patent error, mischievous or lackadaisical whatever it may be, and the complainant was made to suffer the ordeal of continuous difficulty and uncertainty. The particular facts of the case being much more serious than just simpliciter delay in offering possession, the rate of interest for computing compensation ought to have been much more on the higher side but the complainant will be satisfied with whatever the State Commission has awarded as he wants a closure to the litigation. Regarding the argument raised on behalf of the development authority that it is a government authority and “public money” is involved, learned counsel submits that the State Commission has already observed in para 17 of its Order that “We are of the view that there is a lapse on the part of some official of the opposite party, against whom the disciplinary proceedings can be initiated to recover the loss.”.

13.     The complainant duly deposited the earnest money amounting to Rs. 6,90,000/- which was 10% of the consideration amount. He was successful in the draw of lots conducted by the development authority. He thereafter dutifully deposited further 20% of the consideration amount i.e. Rs. 13,80,000/- vide a bank draft. The development authority encashed the bank draft and took the amount into its account. However, it did not accept or acknowledge receipt thereof and (mis)treating it to be a case of not paying the instalment it cancelled his allotment and alongside also deducted 10% from the earnest money. The complainant was impelled to continuously pursue the matter for almost six years between 2012 and 2018 before the development authority at last accepted and acknowledged that the instalment of Rs. 13,80,000/- had in fact been deposited by the complainant at the relevant time in 2012. And even then the development authority refunded the same without any interest or explanation or apology as if it was a benign condescension. But the hard facts are that the complainant was initially put to uncalled for jeopardy by wrongly and unjustifiably cancelling his allotment, he was put to further perilous loss by deducting 10% of the earnest money, and then to wholly unwarranted precariousness by not accepting and acknowledging the fact of having received the instalment of Rs. 13,80,000/-. The development authority accepted its lapse and made refund only after the complainant had made continuous protracted efforts by various means which spread over about six years. There is nothing on record that it conducted any inquiry to ascertain the facts and to fix accountability and responsibility. There is also nothing to show that the departmental action was ever taken against the errant or delinquent functionaries.

14.     The compensation has to be just and equitable, commensurate with the loss and injury suffered. The jeopardy to which the complainant has been put to, as also his troubles and travails, uncertainty and difficulty, mental agony and physical harassment, have already been encapsulated above. The State Commission has remedied the wrong by way of awarding compensation which in its wisdom it has considered to be just and equitable in the particular facts & circumstances and specificities of the case. We do not find any element of disproportion or perversity in the method adopted by the State Commission for computing the compensation, nor do we discern any good reason to dilute or extenuate the award made by the State Commission.

15.     We notice that there has been complete opacity and capricious highhandedness on the part of the development authority, with an intransient strain of remissness. There has been no attempt to undertake any inquiry or fix responsibility. Neither has there been any attempt to undertake systemic improvements so that such lapses do not recur and consumers at large are not put to similar loss and injury in future. There is no explanation as to how a simple and straight matter of reconciling / confirming the encashment of the complainant’s draft and its credit into its account could be an onerous task, and as to why it took a period of almost six years and that too only after the complainant kept on straining every nerve he had to resolve the matter. By not acknowledging the payment which had in fact been actually made, the complainant was made to suffer the wrong of cancellation of his allotment, not to speak of the other troubles and travails he was made to go through. The whole approach of the development authority has been to unjustifiably deduct 10% of the earnest money in the first instance and subsequently even after realizing and accepting its mistake not to bother about making any attempt to remedy the wrong by offering alternative allotment or to make good the 10% deduction wrongfully made from the earnest money, it only deemed it apt to refund the amount of the second instalment in a patronizing manner, without explanation or apology, without a semblance of action on the functionaries responsible or attempts to make systemic improvements. The whole attitude has been as if the complainant ought to be satisfied that the development authority has after all been kind to acknowledge the receipt of his money and has also refunded the same. And this, coupled with an immunity curtain on its own functioning. The development authority is a government authority and is required and expected to function in accordance with the prescribed administrative and financial rules, its accounts are subject to audit, its functionaries are subject to accountability. This case however is a classic example of what not to do. It is not without significance that the scheme in question was over-subscribed and the allotments were made by a draw of lots. Cancellation of one allotment in a malafide and wrongful manner would resultantly make available the unit in question for allotment to others who may not even have been successful in the initial draw of lots, the pregnant implications of this can be well understood without much elaboration. Bad air pervades the whole matter, and it sounds as if something is rotten in the state of Denmark.

16.     The proved facts of the case unarguably contain ingredients of ‘deficiency’ and ‘unfair trade practice’ on the part of the development authority. Both terms ‘deficiency’ and ‘unfair trade practice’ are plainly defined in the Act itself (section 2(1)(g) and section 2(1)(r) of the Act 1986). In respect of ‘unfair trade practice’ we may elaborate that the list provided under section 2(1)(r) is illustrative and not comprehensive or exhaustive. As such, an unfair method or unfair or deceptive practice, as may be judiciously determined on facts and reason after fair and objective appraisal of the evidence and material on record, would qualify as ‘unfair trade practice’ within the meaning of section 2(1)(r).

17.     Clearly the appeal is without substance, bereft of any worth. The same stands dismissed.

The impugned Order dated 05.11.2018 of the State Commission is sustained. The award made therein shall be made good by the development authority through its chief administrator within six weeks from today, failing which the State Commission shall forthwith undertake execution, for ‘enforcement’ and for ‘penalty’, as per the law. The development authority shall be free to make recovery from its errant functionaries responsible, as per its rules and in accordance with the law.

Considering that the development authority is a government authority meant for public good we are consciously refraining from imposing cost for the manifest ‘unfair trade practice’. But the development authority through its chief administrator shall be well advised to inculcate accountability and responsibility and to imbibe systemic improvements so that consumers at large are not put to such loss and injury in future.

18.     The Registry is requested to send a copy each of this Order to the parties in the appeal and to their learned counsel as well as to the State Commission immediately. The stenographer is requested to upload this Order on the website of this Commission immediately.