ESTATE OFFICER, HUDA & ORS vs P S BEDI ENTERPRISES

This revision is directed against the order of the State Commission Haryana dated 31.05.2012 in First Appeal No.240/2003, whereby the State Commission concurred with the findings of the District Forum and dismissed the appeal preferred by the petitioner Authority.

Briefly stated, facts relevant for the disposal of the revision petition are that the respondent complainant, a partnership firm, had applied for allotment of an industrial plot in Pocket 1 Sector 5 Faridabad at the offered rate of Rs.109/- sq. yd. Pursuant to the application, the complainant deposited 25% of consideration for plot measuring 600 sq. yds i.e. Rs.18,542.50 with the petitioner Authority. In support of the application, the complainant submitted the project report and also completed other formalities. The petitioner Authority on 14.07.1984 issued a letter of intent to the complainant firm showing their intention to offer another plot no.9 Sector 5, Pocket 1, Faridabad measuring 605 sq. yds. at a tentative price of Rs.65,945/- calculated @ Rs.109/- per sq. yds. It was stated in the letter that the balance consideration amount i.e. 75% of the cost of the plot shall be payable in six annual instalments with interest @ 10%. The letter of intent made it clear that allotment letter shall be issued in favour of the respondent on completing the requisite formalities detailed in the letter. It is the case of the complainant that he completed the formalities and the petitioner on being satisfied offered possession of plot no. 9, Sector 5, Pocket-1, Industrial Estate, Faridabad to the respondent vide memo no. ALG-85/16189 dated 24.09.1985 and the complainant was called upon to take possession after demarcation either personally or through some authorised representative within seven days. It is alleged that possession of said plot, however, could not be given to the complainant because it was encroached by the jhuggi dwellers. The petitioner authority, thereafter, vide its memo dated 26.09.1994 offered alternative plot measuring 500 sq. yds. in Sector 59, Faridabad @ Rs.425/- per sq. mtr. It was clarified in the memo that in case the offer was acceptable, the acceptance be given to the Estate Officer, Faridabad within 30 days of the issue of letter failing which it would be presumed that plot offered is not acceptable and the money already paid shall be refunded. The complainant vide his letter dated 27.09.1994 addressed to the Estate Officer declined to accept the offer stating that the plot in Sector 59 was not suitable for the industry of the complainant firm and requested for allotment of alternate plot in Sector 27A, 27B, 27C or 28 or any other sector nearer to Delhi, making it clear that complainant was willing to make payment for additional land at the rate fixed by the Estate Officer. The petitioner Authority however on the refusal to accept offer of allotment of plot in Sector 59 withdrew letter of intent issued on 14.07.1984 and refunded the amount deposited by the complainant vide a bank draft dated 28.08.1998. Being aggrieved of the cancellation of the intent letter, the complainant raised consumer dispute in District Forum Faridabad.

The petitioner opposite party its the written statement more or less admitted the factual position. It was, however, pleaded that there was no firm allotment of plot No.9, Pocket 1, Sector-5, Faridabad in favour of the complainant and only a letter of intent giving offer of possession was issued making it clear that the letter will not create any legal right for allotment unless final allotment letter is issued. It was pleaded that possession of the offered plot could not be given because it was inhabited by the jhuggi dwellers and, therefore, an alternative plot inSector-9 was offered to the respondent. The complainant, however, declined to accept the offer. Therefore, offer of allotment given vide letter dated 14.07.1984 was withdrawn and sum of Rs.18,452.50 deposited by the respondent was refunded to him. It was also pleaded that consumer complaint itself is not maintainable because the respondent complainant is not a consumer.

Learned District Forum on consideration of the pleadings of the parties and evidence allowed the complainant and directed as under: "1. The complainant is directed to file another application for the consideration of alternative plot in Sector-5, where the original plot was allotted for the first time, before the Administrator, HUDA and the Administrator HUDA Faridabad is ordered to reconsider the application of the complainant afresh.

The respondent is further ordered to pay interest to the complainant on his deposit at the rate of 12% p.a. with effect from the date of deposit till the date of refund of the amount.

The respondent is also ordered to pay Rs.2000/- on account of mental agony and Rs.1000/- for litigation expenses. In case, re-allotment of any plot is done by the respondent then no interest is payable to the complainant but at the same time the amount, the remaining amount which is 75% to be paid that be accepted by the respondent without any interest."

Being aggrieved of the order of the District Forum, the petitioner preferred an appeal. The appeal, however, was dismissed vide impugned order.

We have heard learned counsel for the parties and perused the record. Learned counsel for the petitioner has assailed the impugned orders of the Fora below mainly on two counts. Firstly it is contended that the orders of the Fora below are without jurisdiction because they have failed to appreciate that the respondent/complainant is not covered under the definition of consumer and as such it could not have maintained a consumer complaint. Expanding on the argument learned counsel for the petitioner has contended that admittedly the complainant is a partnership firm engaged in the business and it had applied for an industrial plot for setting up an industry. Therefore, it is obvious that if at all the complainant hired or availed the services of the petitioner/opposite party it was in relation to a commercial purpose and in view of amended definition of consumer as provided in Section 2 (1) (d) (ii) of the Consumer Protection Act, 1986, the respondent firm cannot be termed as a consumer and it could not have maintained the consumer complaint.

There is force in the above contention. On perusal of the complaint it is clear that the instant complaint has been filed by the respondent partnership firm through its partner Shri P.S. Bedi. It is also not in dispute that the respondent firm had applied for an industrial plot in Sector-5, Pocket-1,Faridabad Industrial Estate. Photocopy of the partnership deed of the respondent firm is on record. On reading of the partnership deed it is clear that the respondent firm came into existence on 11.1.1983 as a result of partnership between Shri P.S. Bedi and his son Shri R.S. Bedi. The partnership deed records that the partnership firm will carry on business of manufacturing corrugated boxes, trading of papers, Advisors and Consultants on Central Excise, Custom & Gold control matters as also the work of management consultancy and that the business of partnership shall be carried out from C-339, Defence Colony, New Delhi and such other places as the partners decide from time to time. Admittedly, the complainant firm had applied for allotment of industrial plot which obviously was for promoting the business interest. Therefore, we have no hesitation in concluding that if at all there was a service contract between the parties the services of the petitioner were hired by the respondent/complainant for commercial purpose.

Section 2 (1) (d) (ii) of the Consumer Protection Act, 1986 defines the term "Consumer" so far as hiring of availing of services is concerned. It reads as under: - (d) "consumer" means any person who

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who ''hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes;

Explanation. For the purposes of this clause, "commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment"

On reading of the above, it is clear that Section 2 (1) (d) (ii) carves out an exception to the main definition of consumer by providing that if the services are hired or availed by a person for any commercial purpose, then he shall not be termed as consumer. As the complainant firm has applied for an industrial plot to promote its business interest, the respondent/complainant is not covered under the definition of "Consumer" and as such it could not have maintained the consumer complaint.

Learned counsel for the complainant has tried to get out of this situation by arguing that the explanation to the Section gives a restricted meaning to the term "commercial purpose." It is argued that in the instant case the partnership firm has availed of services of the petitioner/opposite party for earning livelihood for the partners by way of self-employment and as such the respondent/firm is covered under the definition of "Consumer. " We do not find merit in this contention. On careful reading, we find that the explanation provides that the commercial purpose does not include use by a person of goods bought or services availed exclusively for the purpose of livelihood by means of self-employment. This explanation clearly shows that the benefit is available only to the natural person who needs to earn to sustain his or her livelihood. Complainant in this case is a partnership firm which is not a natural person. Therefore, the complainant by no stretch of imagination can avail the benefit of this explanation.

On reading of the orders of the Foras below we find that both the Fora below have proceeded to decide the complaint as also the appeal in favour of the complainant ignoring the preliminary objection of the petitioner/opposite party and without giving any finding on the plea whether or not the respondent/complainant is a consumer and can maintain the consumer complaint. As discussed above, we hold that respondent firm is not a consumer, therefore, it could not maintain the consumer complaint. Thus, we are of the view that both the Fora below in entertaining the complaint and deciding it in favour of the complainant, have exceeded their jurisdiction. As such, their orders cannot be sustained.

Even on merits it is contended by learned counsel for the petitioner/opposite party, that in the instant case only an offer of allotment was given to the complainant and as the complainant failed to accept the offer same was withdrawn and the money deposited by the complainant alongwith the application was refunded to it by way of bank draft. It is argued that since no valid contract came into existence the Fora below have committed a grave irregularity in holding that the petitioner/opposite party has committed deficiency in service and passing an order against the opposite party. This plea of the petitioner is resisted by the respondent/complainant. Learned counsel for the respondent/complainant has argued in support of the impugned orders.

We find merit in the above contention of learned counsel for the complainant for the reason that the entire case of the complainant is based upon the alleged allotment letter dated 14th July, 1984 which reads as under: - "Sub:- Allotment of plots in the Industrial Estate at Faridabad

Sir,

Reference your application for allotment of an industrial in the Industrial Estate at Faridabad.

I am directed to inform you that it has been decided to offer you industrial plot No9, Sector-5 (Pocket No.1) measuring 605 sq. yds. in the industrial estate, Faridabad. The tentative price of the plot will be Rs.65945/- per sq. meter (Rs.109/- per sq. yd.) A sum of Rs.18452-50 has already been received from you with the application and a sum of Rs.---x--- is now payable by you (after adjusting the excess amount, if any, towards 25% cost of plot.) Balance 75% shall be payable in six equal annual instalments with interest @ 10% per annum. You are requested to send the said amount of Rs.----------in the shape of demand draft in favour of Estate Officer, Faridabad drawn on any scheduled bank payable at Faridabad within 30 days from the issue of this letter.

However, before allotment letter is issued in your favour, we would request you to please complete the following formalities connected with the implementation of your project in the complex/Estate:-

Please get the drawings of your unit prepared from an architect registered with HUDA and submit the same to the Estate Officer concerned. Copy of the Zoning Registration/plan of your unit is enclosed herewith to facilitate you in preparation of the detailed drawings.

Simultaneously, you may apply for loan if required to meet the cost of land, building and machinery sanctioned from Haryana Financial Corporation/Scheduled Bank/any other financial institutions.

Please get the unit registered with General Manager of the District industries centre concerned in the case of a small scale unit or in the case of a large or medium scale unit you should get Director General Technical Development of Government of India registration of letter of intent (in cast of NRIs/POIO the SSI registration can be done at IAG Office Directorate of Industries, 30 Bays Building, Sector-17, Chandigarh.

You may apply to H Aryana State Electricity Board for release of an electric connection to the proposed unit.

You may supply to this office at list of plant and machinery to be installed in the unit for scrutiny and also supply specifications, cost and source of supply of the machinery proposed to be installed.

It is also made clear that this letter will not give you any legal right for allotment unless the final allotment letter is issued.

Proof of having completed the above formalities may be furnished to enable us to issue the allotment letter.

With your zeal to set up a unit, we are sure that the above formalities can be completed by you within a period of 180 days from the date of issue of this provisional letter of allotment failing which this offer shall be constrained to withdraw the offer.

The above exercise is in our mutual interest and we would certainly except your whole--hearted cooperation to make it a success.

Thanking you,"

On reading of the above letter, it is clear that the letter by no stretch of imagination can be termed as allotment letter but it can be termed only as an offer for allotment subject to the complainant fulfilling the requisite formalities. On reading it is clear that the letter itself clarifies that it would not confer any legal right for allotment on the complainant unless the final letter of allotment is issued. Not only this, the letter calls upon the complainant to complete certain formalities before the industrial plot is allotted to it and the formalities were required to be completed within 180 days from the date of issue of the provisional letter of allotment failing which the petitioner shall be constrained to withdraw the offer. Apart from this no other letter of allotment has been shown by learned counsel for the respondent/complainant nor have we been able to find any allotment letter on record. Thus, it is clear that in the instant case pursuant to the application made for allotment of industrial plot only an offer of allotment was given to the complainant. Thus, no executable contract between the parties came into existence. As such, it cannot be said that the petitioner/opposite party has committed any deficiency in service. Further on perusal of para-8 of the complaint it is clear that as per the complainant also it was refunded a sum of Rs.18,452.50P vide draft No.16040 dated 28.8.1998. It is not the case of the complainant that it returned the draft or did not encash the same. Thus, it is clear that the complainant did receive the refund of the advance money paid alongwith the application for allotment. As the complainant has accepted the refund vide bank draft dated 28.8.1998, there was no relationship of consumer and service provider between the parties. Therefore also the complainant could not have maintained the consumer complaint after having received the refund of the part consideration paid by it. Fora below have also ignored this aspect of the mater.

In view of the discussion above, it is clear that the orders of the Fora below are based upon a wrong appreciation of facts and also without jurisdiction, particularly when the respondent firm is not a consumer. The impugned orders, therefore, cannot be sustained. We accordingly, allow the revision petition, set aside the impugned order and dismiss the complaint.

Parties to bear their own costs.