H.U.D.A. OF CHANDIGARH vs NARENDER SINGH DOON

WHETHER the allotment of residential sites by the Haryana Urban Development Authority by way of auction is intrinsically different from the various other modes of allotment of such sites? This is indeed the solitary though significant question in this set of seven connected appeals. Learned Counsel for the parties are agreed that the primal issue of law and facts being common this judgment will govern all of them.

THE representative matrix of facts may be noticed from First Appeal No. 589 of 1993, Haryana Urban Development Authority, Chandigarh & Others v. Narender Singh Doon. THE admitted position is that the appellant-HUDA had sought to develop an extensive residential colony in the Police Lines area of Hissar way back in the mid-nineteen eighties. With regard to the said colony the Haryana Urban Development Authority made allotments of plots by various modes including those by auction, by direct allotment, by draw of lots and also by way of discretionary quotas. THE respondent-complainants and many others were the recipients of their respective plots allotted to them by way of auction and were admittedly governed by the terms and conditions of the allotment letters issued to them. In accordance therewith they made payment of 10% of the price of the'' plots initially and deposited 15% on the issuance of the allotment orders to them. It is common ground that the balance was to be paid by six equated annual installments or more thereafter. It is the common case of the respondent-allottees that the terms and conditions announced at the spot were that they would be delivered possession of their relevant plots in a developed condition within one year. Further more as per clause (5) of the allotment order this had necessarily to be done on the overall development of the area. The glaring grievance of the respondents is that neither any development was done in the area by the appellant-HUDA, and in fact it had not even been able to secure the possession of site itself far from developing the same and delivering individual plots to their respective allottees. What is more the appellant-HUDA was unable to indicate any time in the foreseeable future when delivery of the plots would be made. The respondents further stand was that they had been paying the amount of installments according to the schedule and in case of any delay the appellant-HUDA had charged interest at the rate of 10% from them. The action of the appellant-HUDA in neither giving possession nor any recompense for the amounts received by it was assailed in vituperative terms including one of indulging in an unfair trade practice and it was highlighted that the huge amounts were amassed by the appellant-HUDA by way of payments for plots of land which it was unable to secure possession itself far from delivering it to the complainant-respondents. Consequently the relief claimed was that at least interest be awarded to the allottees on the deposited amount till the time the appellants duly develop the area and delivers actual possession to the complainants.

On notice being issued the appellant-authority had put in an evasive reply skirting the primal issue and the grievance of the respondent-consumers. The routine plea taken was that after development, the actual and physical possession of the plot would be delivered to them without indicating any time in the foreseeable future for doing so. However, it had been frankly admitted that the development work could not be started in the Police Lines area so far at all due to the unavoidable circumstance that the police authorities had adamantly declined to vacate the area. It was the plea that this recalcitrance of the police authorities conferred immunity on the appellants, from giving any relief to the aggrieved consumer-respondents.

THE District Forum took the view that the issue now stood covered by precedent and relying on II (1993) CPJ 1219 Estate Officer, HUDA v. Madan Mohan Gandhi & Others held that the respondent-consumers were entitled to interest at the rate of 18%. It also noticed that the National Commission had expressly affirmed the aforesaid order in Revision Petition No. 326 of 1993, Chief Administrator, HUDA v. Madan Mohan Gandhi directed against the same which was dismissed on the 8th of September, 1993. Consequently all the complaints were allowed with the relief of the grant of interest at 18% on the deposited amount till the date when the physical possession of the sites is delivered to the respondent-allottees. Mr. Sanjay Majithia, the learned Counsel for the appellants in one set of appeals and equally Mr. O.P. Sharma in the other set had spear-headed their arguments on a single point. It was contended that herein the allotment to the respondents was made in an auction and such an allotment was intrinsically and realistically different from the other modes of allotment by the Haryana Urban Development Authority. It was sought to be argued that the bidders in the auction, who were subsequently issued allotment orders and had paid installments would not be consumers within the meaning of the Act because of the mere fact that the methodology of allotments in their favour was by way of an auction and not by way of lots, discretionary quotas or simple allotment by the appellant-authority. Without elaborating any rationale the plea was that the self same HUDA was out side the pale of the consumer jurisdiction as regards residential sites to allottees through an open auction. Reliance was sought to be placed on a short order of the National Commission in Ramesh Chand and Krishan Lal v. Chief Administrator, HUDA. First Appeal No. 80 & 81 of 1992 decided on 12th of October, 1992, which was followed in another short order in Revision Petition No. 79 of 1993, Haryana Urban Development Authority, Jind v. Devki Rani.

ON the other hand the learned Counsel for the respondents have forth-rightly contended that on principle there is not the distinction between the various modes of allotment of residential sites by the Haryana Urban Development Authority including that by way of auction. It was pointed out that the fallacy lies in assuming that an allotment by way of auction was an outright sale or purchase of immoveable property. It was submitted that in allotments by way of auction, title in the sites does not forthwith pass to the allottees and they are subject to the identical terms and conditions as applicable to other modes of allotment. In sum, the stand was that the error was in treating an allotment of site by the method of auction as an outright sale and purchase of property passing the title to the vendee. In any case it was submitted on behalf of the respondents that the matter is now finally set at rest and concluded by the order of the National Commission in The Chief Administrator, HUDA v. Madan Mohan Gandhi (Supra) wherein the elaborated view point of this Commission in Estate Officer, HUDA v. Madan Mohan Gandhi & Others, II (1993), CPJ 1219 has been unhesitatingly affirmed. In appraising the rival contentions it becomes necessary to elaborate the matter a little because of some confusion sought to be raised by the appellant-HUDA by projecting an apparent conflict of precedent on the point. The Haryana Urban Development Authority Act, 1977 came into force on the 17th of May, 1977. The very preamble of the said Act highlights the fact that it was intended to establish an authority for the express purpose of undertaking urban development in the State of Haryana and all means ancillary thereto. That the said Authority has sought to follow the provisions of the Act in letter and spirit is not in doubt and there is no gain-saying the fact that it has done yeoman''s service in extending out its services to the consumers all over the State of Haryana. It is common ground before us that the appellant is engaged in serving the public in the matter of providing housing by acquisition of land; development of sites; construction of houses thereon and allotment of plots and housed to the public. Thus it is equally, engaged in rendering services for consideration to the public and therefore, those who are allotted plots and houses by the Board are equally consumers within the definition in Section 2(1)(d). The activities of the Haryana Development Authority, therefore, clearly come within the ambit of the ratio in the landmark case of the National Commission I (1991) CPJ 1 (NC), U.P. Avas Evam Vikas Parishad (Housing & Development Board) v. Garima Shukla & Others and I (1991) CPJ 7 (NC), U.P. Avas Evam Vikas Parishad (Housing & Development Board) v. C.P. Sharma & Others. What then merits notice is Section 15 of the Haryana Urban Development Authority Act which pertains to the disposal of land. Sub-sections 3 & 5 thereof deserve quotation in extenso : - 15 (3)" Subject to the provisions herein before contained, the Authority may sell, lease, or otherwise transfer whether by auction, allotment or otherwise, any land or building belonging to it on such terms and conditions as it may, by regulations, provide." 15 (5) "Notwithstanding anything contained in any other law for the time being in force, any land or building or both, as the case may be, shall continue to belong to the authority until the entire consideration money together with interest and other amount, if any, due to the Authority on account of the sale of such land or building or both is paid." A plain reading of the above would show that this Section visualises a lease or transfer of land by way of auction or by allotment or otherwise which would include all other modes spelt out in the rules and regulations framed under the Act. What is significant is the fact that Sub-section (3) aforesaid draws no line of distinction between lease or transfer either by auction or by allotment or otherwise. Yet again the provisions of Sub-section (5) aforequoted are significant. This interims provides that any land or building or both shall continue to belong to the authority until entire consideration money together with interest and other amounts if any due to the authority etc. are duly discharged. This provision gives the quietus to the view that allotment of a residential sites is obviously not an outright sale or purchase of the property and no title passes until and unless the requisite conditions of allotments are satisfied. Even otherwise it is elementary that title in immoveable land of the value of more than Rs. 100/- can only pass by a duly registered deed and not by a mere allotment order with innumerable conditions imposed subsequent to an allotment by auction. Therefore, under the Haryana Urban Development Authority Act in particular it would be a fallacy to label an allotment of a site on specific terms and conditions by way of auction as an outright sale and purchase of property.

WHAT next calls for notice is the fact that under the Haryana Urban Development Authority Act, the Haryana Urban Development Authority (Disposal of Land and Buildings) Regulations 1978 have been duly framed and promulgated. Regulation 5 thereof provides for procedure in case of sale or lease of land or building by allotment. Similarly regulation 6 pertains to sale or lease of land or building by auction. The relevant part thereof may be noticed in extenso : - (6) "Sale of lease of land or building by auction- (1) In the case of sale or lease by auction, the price/premium to be charged shall be such reserve price/premium as may be determined taking into consideration the various factors as indicated in Sub-regulation (1) of Regulation 4 or any higher amount determined as a result of bidding in open auction.

(2) 10 percent of the highest bid shall be paid on the spot by the highest bidder in cash or by means of a demand draft in the manner specified in the Sub-regulation (2) of Regulation 5. The successful bidder shall be issued allotment letter in form CC or ''C-II'' by registered post and another 15 percent of the bid accepted shall be payable by the successful bidder in the manner indicated, within 30 days of the date of allotment letter conveying acceptance of the bid by the Chief Administrator; failing which the 10 percent amount already deposited shall stand forfeited to the Authority and the successful bidder shall have no claim to the land or building auctioned.

(3) The payment of balance of the price/ premium, rate of interest chargeable and the recovery of interest shall be in the same manner as provided in Sub-regulations (6) and (7) of Regulation.

A plain reading of Sub-regulation (2) above would make it manifest that allotment by way of auction far from being in any way an outright sale of an immoveable property is yet another mode of allotment contingent on the conditions of the allotment letter in form ''CC and even a failure to pay the balance of 15 % of the bid would result in the forfeiture of the bid money tendered and the successful bidder would have no claim to the land or building auctioned. Even otherwise reading Regulations 5 & 6 together would make it manifest that allotment by any of the two modes is on a virtually identical footing barring marginal differences. Under both the said regulations the form of the allotment letter is statutorily prescribed in form ''C'' under Regulation 5 whilst the corresponding one under Regulation 6 the allotment of letter by auction is by the prescribed form ''CC''. A reading of the terms and conditions of the allotment for the two modes would show that they are totally similar and in fact substantially identical. This would make it manifest that the HUDA Act and the regulations and the statutory forms draw not the least distinction between the allotment of sites in the various modes barring of course minor modifications warranted by the two separate methods. 10-A.. However all doubts on this score are set at rest when reference is made to the conditions in form ''CC'' expressly prescribed for use of an allotment letter in cases of residential industrial, commercial plots/buildings disposed of by auction. The relevant conditions which merit notice may be quoted for the facility of reference : - "(3) The sum of --deposited by you as bid money at the time of bid will be adjusted against the said plot/building. (6) The possession of the site will be offered to you on completion of the development works in the area. In the case of building or undeveloped land, the possession shall, however, be delivered within 90 days from the date of this letter. (8) In case the installment is not paid by the 10th of month following the month in which it falls due, the Estate Officer shall proceed to take action for imposition or penalty and resumption of plot in accordance with the provisions of Section 17 of the said Act. (9) In the event of breach of any other condition of transfer, the Estate Officer may resume the land in accordance with the provisions of Section 17 of the Act. (10) The land/building shall continue to belong to the Authority until the entire consideration money together with interest and other amount, if any due to the Authority on account of sale of such land or building or both is paid. You shall have no right to transfer by way of sale, gift, mortgage, or otherwise the plot/building or any right, title or interest therein till the full price is paid to the Authority, except with the prior permission of the competent authority. (11) On payment of 100% of the price of the plot/building you shall execute the Deed of Conveyance in the prescribed form and in such manner as may be directed by the Estate Officer. The charges for registration and stamp duty will be paid by you."

Now even a cursory reading of the aforesaid conditions would show that possession of the site to be delivered later is contingent on the conclusion of the development works in the area and further in case of default of pairing of the installment by the 10th of the month following the month on which it falls due the allottee is liable to resumption of the not in accordance with the provisions of Section 17 of the Act. Even otherwise in the event of the breach of any condition of transfer, the Estate Officer is empowered to resume the land in accordance with the relevant provision. The condition No. 10 is indeed significant on the point by dealing that the land shall continue to belong to the authority until the entire consideration money together with the interest and other amounts has been paid. However what finally concludes the matter is condition No. 11 that it is only on the payment of the 100% price of the building that deed of conveyance will be executed by the allottee in the prescribed form and manner alongwith registration and stamp duty is paid and then alone title of the land would pass to the bidder-allottee. In our view all these conditions give the lie-direct to the appellants purported stand that an allotment by way of auction is akin to an outright sale of immoveable property and for that reason excluding it from the scope of a consumer dispute.

WITHIN the consumer jurisdiction it is unnecessary to overly elaborate the matter. It suffices to mention that the other well known modes of allotment, either by way of draw of lots, or direct allotment by the HUDA itself, and equally by way of discretionary quota vested in the State Government and in practice exercised by the Chief Minister of the State of Haryana are on an equal footing. In the recent decision of this Commission in Complaint Case No. 27 of 1993, Balbir Singh v. Haryana Urban Development Authority & Ors., decided on 20th of January, 1994, we had occasion to elaborate the matter and concludes as follows : - "Inevitably the answer to the question posed at the outset has to be rendered in the affirmative. It is held that allotment of residential sites by way of discretionary quota is squarely within the ambit of the services rendered by the HUDA to its various allot tees."

To sum up on this aspect it is somewhat plain that the HUDA Act and the regulations framed there under visualise allotment of residential sites by various modes like those by way of auction or allotment or by draw of lots or exercise of a discretionary quota and otherwise as well. On principle, there is no distinction worth the name in the mere methodology in the allotment of sites subject to virtually identical terms and conditions. In the context of the backdrop of the statutory provisions of the HUDA Act and the regulations and instructions therein it is a fallacy to label a allotment by the method of auction as an outright sale or purchase of property. No title in land passes in any such auction and all that the successful bidder gets is an allotment subject to the virtually identical conditions as in the other modes of allotment with minor variations.

In the light of the above on principle and primarily on the language of the HUDA Act and its regulations etc. the answer to the question posed at the outset has to be rendered in the negative. It is held that the allotment of residential sites by way of auction is in no way intrinsically different to the various other modes of allotment to such sites.

IN view of the aforesaid conclusion the allottees of the housing sites by way of an auction conducted by the HUDA are as much consumers as are the allottees by way of the other modes under the HUDA Act and its regulations. It remains to clear the cob-webs with regard to precedent, raised on behalf of the appellants. Mr. Sanjay Majithia''s reliance on Ramesh Chand v. Chief Administrator, HUDA (supra) is obviously vain. The short order does not in the least lays out any such ratio and is patently based on the factual assumption that the case was one of the pure and simple transaction of sale of immoveable property & therefore denying the allottees the beneficent protection of the Consumer Protection Act. Equally Devki Rani''s case (supra) on which reliance was placed merely follows Ramesh Chand v. Chief Administrator, HUDA (supra) and for identical reasons is distinguishable.

ON the other hand the matter is concluded even by the precedent in favour of the respondents. This Commission in the elaborate order in Estate Officer, HUDA v. Madan Mohan Gandhi & Others (supra) held in no uncertain terms that an allotment of residential sites by way of auction conferred the status of a consumer upon such an allottees. That case was assiduously assailed on behalf of the appellant HUDA before the National Commission in Revision Petition No. 326 of 1993, Chief Administrator, HUDA v. Madan Mohan Gandhi (supra). The National Commission in no uncertain terms held as follows : - "We do not find any illegality or jurisdictional error in the order passed by the State Commission. Hence the Revision Petition is dismissed."

We are of the view that the aforesaid affirmance of the view of this Commission in Madan Mohan Gandhi''s case by the National Commission itself concludes the matter against the appellant. However any lurking doubt on this aspect seems to have been set at rest by the recent decision of the Hon''ble Supreme Court in Lucknow Development Authority v. M.K. Gupta III (1993) CPJ 7 (SC). It is a matter of recent history that the decision of the National Commission in U.P. Avas Evam Vikas Parishad (Housing & Development Board) v. Garima Shukla & Others I (1991) CPJ 1 (NC) and U.P. Avas Evam Vikas Parishad (Housing & Development Board) v. C.P. Sharma & Others I (1991) CPJ 7 (NC) holding that the Lucknow Development Authority came within the ambit of the consumer jurisdiction were assailed before the Supreme Court primarily on the ground that the transactions therein amounted to sale and purchase of property and consequently was not a service. Indeed the National Commission stayed its hand during the tendency of the case in the Supreme Court and the consumer jurisdiction stood stalled for a sizable time with regard to housing construction and other building activities, coming within the scope of the consumer jurisdiction on this primal ground. However the final Court in a landmark judgment held as under : - "The provisions in the Acts, namely, Lucknow Development Act, Delhi Development Act or Bangalore Development Act clearly provide for preparing plan, development of land, and framing of scheme etc. Therefore, if such authority undertakes to construct building or allot houses or building sites to citizens of the State either as amenity or as benefit then it amounts to rendering of service and will be covered in the expression "service" made available to potential users. A person who applies for allotment of a building site or for a flat constructed by the development authority or enters into an agreement with a builder or a contractor is a potential user and nature of transaction is covered in the expression "service of any description". It further indicates that the definition is not exhaustive. The inclusive clause succeeded in widening its scope but not exhausting the services which could be covered in earlier part. So any service except when it is free of charge or under a constraint of personal service is included in it. Since housing activity is a service it was covered in the clause as it stood before 1993."

IN the light of the aforesaid ratio we must in all fairness notice the plausible stand of the learned Counsel for the respondents that Lucknow Development Authority''s, case eliminates all distinction with regard to the method in which service is provided by the HUDA or similar authorities under the Lucknow Development Act, Delhi Development Act or Bangalore Development Act. It was forcefully submitted on behalf of the respondents that any observation to the contrary even by the National Commission would now not hold the field after the Supreme Court declared law in no uncertain terms, under Article 141 of the Constitution of INdia.

IN view of the somewhat exhaustive discussion aforesaid all these appeals namely First Appeal Nos. 589,590 & 591 of 1993 and 51, 52, 53 & 54 of 1994 preferred by the Haryana Urban Development Authority are without merit and are hereby dismissed. The respondents-consumers are entitled to their costs as well which are assessed at a sum of Rs. 300/- in each appeal. Appeals dismissed.