Brig K G Kuthiala vs ARMY WELFARE HOUSING ORGANISATION

THIS first appeal is directed against the order dated 19.4.1994 of the Delhi State Commission, dismissing the complaint in limini following its earlier decision in Lt, Col. B.L. Gupta v. M.D., A.W.H.O., III (1992) CPJ 70, holding that the State Commission has no jurisdiction to entertain the complaint against Army Welfare Housing Organisation.

THE case of the complainant is that he is a member and allottee of a flat constructed by the Army Welfare Housing Organisation (for short called AWHO) which is registered under the Societies Registration Act, 1860, which acquire land, develops it and construct houses/flats for allotment to its members. The member allottees of houses/ flats fully pay for the services rendered by the Army Welfare Housing Organisation. According to the complaint, the flat allotted to the complainant had a major structural defects in the form of through crack in the roof slab which is getting widened and extended to the walls of the flat with the passage of time. Since the defect is structural in nature numerous attempts by Army Welfare Housing Organisation to repair the same by surface repairs have failed to remove the defect and thus the complainant has suffered extensively. It is further alleged that in October, 1993 Army Welfare Housing Organisation had asked the complainant to treat the matter closed implying thereby to disown the responsibility to effect the repairs to the defective construction and to provide relief to the complainant. The complainant filed complaint being No. C -47/94 before the Delhi State Commission which has been dismissed in limini by the impugned order. It has been brought to our notice that the members of Army Welfare Housing Organisation who are allotted plot/house/flat fully pay for each and every service rendered to them. The rules and regulations framed and annexed with their application form for registration of membership of Society show the liability of service charges to be recovered from members as certain percentage charge from each project wise liability falls on me members. Rule 5A inter alia provides that some retired servicemen/civilian may be employed on the approval of the Adjutant General at prescribed conditions of service at scales already existing for such employees of Adjutant General Branch. Their expenses are paid from the funds which are raised during the course of the business of the organisation. Each and every employee of Army Welfare Housing Organisation are thus paid their salaries and other perks from the funds of Army Welfare Housing Organisation including the Army Officers working with Army Welfare Housing Organisation which in turn are raised by recoveries from the members. The employees of Army Welfare Housing Organisation enjoy the benefits of 8.33% of contributory Provident Fund, benefit of interest on unlimited voluntary contribution to Provident Fund over 8.33%, one month pay as medical allowance per year, L.T.C. benefits, house rent allowance, dearness allowance and several other benefits of similar nature and all these benefits are paid from the funds raised from contributions from members of Army Welfare Housing Organisation. There are many activities of Army Welfare Housing Organisation generating profits. Army Welfare Housing Organisation collects non -refundable fee from the members, collects transfer charges at the rate of 2% of the cost of flat/house for mutual interchange of flats/houses between the members which has lately been reduced, charges higher cost for same plots/flats from civil allottees, offers consultancy services on payment to other agencies Authorities, undertakes construction projects on behalf of other agencies and organisation. It would thus be seen from the facts brought to our notice that Army Welfare Housing Organisation is carrying on systematic activity of construction of houses/flats for allotment to its members against consideration. Whether Army Welfare Housing Organisation only promotes housing schemes for retired and serving armed personnel at a ''no profit no loss basis'' is not the relevant factor for consideration whether the activities of Army Welfare Housing Organisation constitutes service within the contemplated under Section 2(1)(o) of the Consumer Protection Act, 1986, Army Welfare Housing Organisation is engaged in rendering service for consideration and clearly come within the ambit of the scope of the definition of service.

IN the recent decision of the Supreme Court in Lucknow Development Authority v. M. K. Gupta, decided by Supreme Court reported as it has been ruled that the construction of a house or flat for the benefit of person for whom it is constructed, he may do it himself or hire services of a builder or contractor and later being for consideration is service as defined in the Consumer Protection Act. 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 contactor. The one is contractual service and other statutory service. If the service is defective or there is any defect in construction activity it would amount to denial of comfort and service to a consumer. Such disputes are not in respect of immovable property but deficiency in rendering of service of particular quality or grade. The stand of the Delhi Development Authority before the Supreme Court was also that it was engaged in construction activity on "no profit no loss basis". The Supreme Court ruled that if the statutory Authority such as Lucknow Development Authority or Delhi Development Authority constituted under the State Acts carry on planned development of the cities in the State, they are amenable to Consumer Protection Act, 1986 for any act or omission relating to housing activity such as delay in delivery of possession to the allottee, non -completion of the flat within the stipulated time, or defective and faulty construction, etc. Army Welfare Housing Organisation is not rendering any service free of charge but is engaged in the systematic activity of construction of houses/flats for benefit of its members for whom it is constructed and there is the element of the payment of the consideration for the services rendered.

FOR the above reasons the impugned order is set aside and the case is remanded back to the Delhi State Commission for trial of the complaint on merits on the basis that the complainant is a consumer within the meaning of the Act. There will be no order as to costs. Appeal allowed. __