Gwalior Development Authority vs PRAMOD KUMAR TIWARI

ALL these Appeal Nos. 298/97, 335/97, 302/97, 338/97, 120/97, 84/97 filed against the order dated 26.4.1997, 24.5.1997, 26.4.1997, 15.5.1997, 10.2.1997,30.1.1997passed by District Consumer Disputes Redressal Forum, Gwalior in their Cases Nos. 334/96, 30/97, 336/96, 8/97, 207/96, 92/96 respectively are being disposed of by one composite order because the facts and circumstances, law points and issues involved are exactly identical. The District Forum has in all these cases ordered refund of earnest money alongwith interest and with or without cost of proceedings. Advocate''s fee and compensation etc.

ALL these cases are in respect of deficiency in service by Gwalior Development Authority for failure to allot plots to the complainants despite having taken registration amount and earnest money, several years back. The main arguments of the appellant are as under - (i) The appellant has on the one hand argued that in absence of cause of action the complaint should have been dismissed and on the other hand has argued subsequently that complaint was time barred having been filed a number of years after the deposit of earnest money. (ii) That for want of acquisition of land and allotment by the Government, GDA could not develop the plots. Therefore, the complainant should have waited for acquisition of land and then allotment to the GDA by the Government. (iii) That "earnest money" being not a "consideration" the complainant was not a "consumer" as has been held by Hon''ble National Commission I (1995) CPJ 3 (NC). (iv) That the rate of interest should not have been more than 12% because an interest of more than 12% amounts to penal interest.

Heard the arguments of the appellant''s Counsel. So far as the respondents are concerned, in some cases heard their oral arguments, in other cases perused their written arguments and only in few cases closed the appeals for orders after declaring ex parte against the respondent.

GIST of the pleadings on behalf of respondents orally or in writing are as follows : (a) Respondents had deposited registration amount initially on reading the advertisement. However, after a gap of two to three years they were asked by the appellant to deposit first instalment if they were interested in plot. This amount varied depending upon the size of the plot. Thus giving them an impression that the land was available for allotment. Having asked them to deposit, it was the duty of the appellants to forewarn them about likely delay or to give them land elsewhere, because during the intervening period, money lost its value and was not enough to buy any land. Therefore appellants should be made to pay penal interest because of deficiency in service. (b) Appellants call themselves an organization created to work on ''no profit no loss basis'' to provide housing to poor people at reasonable cost. However, they have not dealt with all the respondents similarly and have shown undue favour to some. This is demonstrated by the fact that they have carried out orders of District Forum and returned the amount with 18% interest in few cases, while they have done nothing in majority of cases. Such unequal treatment of consumers is not expected from a body formed by Government. In these circumstances the appellants deserve no sympathy normally shown to Development Authority by Consumer Forums. (c) National Commission by their recent judgment on 16.1.1995 in a case reported in II (1995) CPJ 43 (NC), have by a majority view held that ''earnest money'' deposited is also a consideration and therefore, its retention beyond reasonable time can be termed as deficiency in service. (d) Appellants have by their action deprived the consumers of their entire savings and have reduced them to a position where they cannot buy a plot and hence order of District Forum about 18% interest is fully justified.

In the light of pleadings of both parties we shall now examine the arguments of appellant. (a) So far as the question of limitation is concerned, the appellant had not so far refused allotment of plots to the complainants, as such the cause of action continued to exist till the filing of these complaints. It is also wrong to say that there was no cause of action. Non-allotment of plots, despite collection of earnest money was the cause of action. (b) So far as this argument of the appellant is concerned that the allotment could not be made because the Government had not so far acquired land and allotted the same to the appellant, it is pertinent to note here that the respondents were not informed in any way that the allotment will be subject to condition of acquisition of land and then subsequently allotment to the GDA. There is absolutely nothing on record to show that the complainants were made aware of this fact that they may have to wait for a number of years for allotment of land because it is commonly known that land acquisition proceedings take long period of number of years. There is also nothing on record to show that the appellant had paid in advance ''compensation'' to the Government for acquisition of land. The GDA should not have floated their scheme if the land was not available or should have specifically mentioned it in the advertisement or while asking the complainant to deposit the earnest money that land acquisition proceedings are in process or have to be initiated and allotment may take some time accordingly. This virtually amounted to unfair trade practice and was clear-cut deficiency in service.

THE appellant has drawn our attention to (I) 1995 CPJ 3 (NC) wherein the Hon''ble National Commission held that earnest money could not be said to be a "consideration" and non-payment of interest on such money does not amount to "deficiency" in service. But, in the subsequent order in Revision Petition No. 4950 of 1994 decided by Hon''ble National Commission on 16.1.1995 II 1995 CPJ 43 (NC) the National Commission as per majority judgment delivered by Hon''ble Justice Balakrishna Eradi, President and Hon''ble Justice D.S. Yadav, Member held as under: "THE case is fully covered by the majority opinion of this Commission expressed in HUDA of Kamal v. Mahabir Singh & Anr., Revision Petition No. 154 of 1993 decided on 11.5.1994. In that case the majority view was that the process of rendering of service commences when HUDA invites applications for allotment of plot and in response to that offer persons apply for the same with necessary deposits. In that case it was also urged on behalf of the HUDA that according to the brochure issued by HUDA inviting applications for allotment of plots, it has been especially mentioned that no interest was payable on the money of the applicant for the period for which the same remained lying with the Authority. That argument was rejected. 12. THE observations of the State Commission made in that case that HUDA is not entitled to withhold the deposits received without payment of any interest for indefinite period of time. Those observations were approved by the majority view. In that case also the deposits were refunded to the unsuccessful applicants as in the present case after 8 months. THE District Forum in that case had allowed interest on the deposits. THE State Commission upheld that decision and dismissed the appeal filed by HUDA. HUDA came in revision to this Commission. Vide majority view that revision petition was dismissed".

In the cases referred to above the earnest money had already been refunded by the Haryana Urban Development Authority and it was after refund of earnest money that the complainants filed complaints under the Consumer Protection Act before District Forum, Hissar, claiming interest at the rate of 18% per annum on earnest money deposited as is specifically stated in para 6 of the order of the Hon''ble National Commission. The District Forum ordered payment of interest at the rate of 18% and the State Commission had upheld the order of the District Forum. The period of deposit in the above cases was only a few months whereas in the instant case, it is several years. Thus as held by Hon''ble National Commission as quoted above the argument of the appellant that "earnest money" is not a ''consideration'' is not maintainable. So far as the argument regarding rate of interest being on higher side is concerned in the cases cited above the Hon''ble National Commission has upheld the orders granting interest at the rate of 18%. Therefore, this argument of the appellant also has no force.

APPELLANTS in their appeal memos and pleadings before us cited several judgments of State Commission in which 12% interest was considered reasonable. We have also in some cases of Gwalior Development Authority taken a view that 18% interest is allowed in exceptional cases because it is penal interest. As pointed out by us in para 9 the Hon''ble National Commission has allowed 18% interest depending on circumstances of a case concerning Development Authorities. State Commission of M.P. has also allowed interest @ 18% in some cases. Law of natural justice demands that both parties be heard and the view taken would depend on the circumstances of the case and the pleadings made before us during final arguments. In the present cases respondents have made out a strong case for upholding the order of District Forum. They have pointed out how after asking them to deposit first instalment the appellant has done nothing to give them land. Not only this their money was kept locked up for six to seven years with opposite party and the money now is not enough to buy any plot. Thus poor man''s savings have been wiped out. Respondents also pointed out that appellant has refunded money with 18% interest in few cases and have done nothing in other cases in carry out orders of District Forum. Thus consumers are not being treated uniformly by appellants. Appeal memo is same in all cases and yet treatment of consumers is dis-similar. After hearing their pleadings, we are of the opinion that appellant''s arguments have no merit and the appeal deserves to be dismissed.

HOWEVER, in the cases quoted above decided by Hon''ble National Commission after ordering payment of interest at the rate of 18%, no costs were ordered to be paid. As such in the instant cases, we direct that wherever orders have been passed for payment of costs of proceedings or Advocate''s fee or compensation, these parts of the order are hereby set aside and the rest of the order is maintained as it is. In those cases where the appellants have refunded the amount with 5% interest, they will make payments after adjusting this amount. With this modification, all these appeals are partly allowed. No order as to costs. Appeals partly allowed. ______________