HARYANA URBAN DEVELOPMENT AUTHORITY vs VEENA KAKKAR

THESE are two Revision Petitions against the common order in First Appeal Nos. 521 and 522 of 1993 passed on 7th December, 1993 by the State Commission of Haryana. As such both the Revision Petitions are disposed of by this order.

THE Revision Petitioner- Haryana Urban Development Authority advertised for sale of plots in Sector 55, Gurgaon and Sector 45, Faridabad by draw of lots in January, 1992. The respondent Smt. Veena Kakkar deposited the earnest money amounting to Rs. 27,324/- in the case of the plot in Gurgaon and Rs. 23,931/- in the case of the plot in Faridabad within time. The draw of lots was concluded in the case of Gurgaon on the 5th September, 1992 and in the case of Faridabad on 28th July, 1992 and in both the cases the respondent did not succeed in getting any allotment in the draws.

IN the applications in the prescribed form for allotment of plots it was agreed to by the applicant that "No interest shall be payable on the money of the applicant for the period for which the same is lying with the authority".

THE Revision Petitioner HUDA refunded the earnest money in both these cases: in the case of Gurgaon on 21st September, 1992 and in the case of Faridabad on 7th August, 1992. After receiving the refund of the earnest money, the respondent Smt. Kakkar filed the complaints under the Consumer Protection Act before the District Forum, Hissar, claiming interest of 18% p.a. on the earnest money deposits and compensation of Rs. 5,000/- in each of these cases.

HOWEVER , the District Forum held that the applicant was entitled to interest at 18% p.a. for the period for which the earnest money remained in deposit with the revision petitioner and cited the order of the Haryana State Commission in Appeal No. 97 of 1993 in support of its decision.

THE State Commission upheld the orders of the District Forum and reinforced its decision with reference to another precedent, Estate Officer, HUDA v. Smt. Parmeshwari Devi of Hissar, in which the State Commission held that HUDA was not entitled to withhold the deposits received without payment of any interest for indefinite period of time. The Revision Petitioner has challenged the order of the lower Forums cm various grounds: (i) The respondent-complainant Smt. Kakkar was not a ''consumer'' as defined under the Consumer Protection Act as the matter related to sale and disposal of land. There was no hiring of any service or sale or purchase of any goods. (ii) The earnest money deposits were received in accordance with the terms and conditions of agreement between the parties and the respondents in their applications for the allotment of plots had specifically stated that no interest would be payable on the earnest money deposit. (iii) There was no delay in the refund of the earnest money. These were refunded promptly within one month of the draw of lots at which the respondent complainant did not succeed.

There is considerable force in the grounds on which the Revision Petitioner HUDA has at tacked the orders of the State Commission and 1 the District Forum. (i) The earnest money is not in the nature of consideration paid for purchase of any goods or for rendering of any service; (ii) Again as the respondent Smt. Kakkar did not succeed in getting an allotment after the draw of lots, she did not become a ''consumer'' vis-avis Revision Petitioner HUDA. She could have become a ''consumer, under the Consumer Protection Act only after she had been successful in the draw of lots; (iii) Refund of earnest money is not a service to be rendered under any intended agreement for sale of goods or rendering of service.

IT would be evident from above that the respondent Smt. Kakkar was not a ''consumer'' under die Consumer Protection Act. There was no delay on the part of the revision petitioner in refunding the earnest money deposits, earnest money did not constitute a consideration as a quid pro quo for which the revision petitioner was to render any service or supply any goods to the respondent, refund of earnest money deposits in any such transaction is not in the nature of a service to be rendered by a party which has to refund the amount. We, therefore, hold that the District Forum and the State Commission have wrongfully exercised their jurisdiction under the Consumer Protection Act and given an award which cannot be sustained, both on facts and in law. The Revision Petition is allowed and the orders of the State Commission and the District Forum are set aside. There is no order as to costs. Hon''ble Mr. Justice B.S Yadav, Member for self and on behalf of the Hon''ble Mr. Justice V. Balakrishna Eradi, President.

WE have gone through the Order proposed by the learned Member Shri Y. Krishan. However, we respectfully do not agree with his findings. The case is fully covered by the majority opinion of this Commission expressed . 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 I 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. 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 view of the above the present Revision Petitions are liable to be dismissed and we order do so accordingly. We make no order as to costs.