KARIM BUX CHAUHAN vs RAJASTHAN HOUSING BOARD

THIS is an appeal from the order, dated 31.5.1994 made by the District Forum, Jodhpur in Complaint Case No. 653 of 1993. By its impugned order the District Forum has dismissed appellant''s complaint on the ground that the dispute between the parties involved costing principle and may better be resolved by a regular Civil Court than by the Forum in a summary way.

THE appellant is a retired IVth Class Government servant. On 22.7.1995 he filed a complaint under Section 12 of the C.P. Act, 1986 (the ''Act'') before the District Forum, Jodhpur alleging therein that in order to get a house of M.I.G. (A) Category at Jodhpur under respondents General Registration Scheme, 1982 he had got himself registered with the respondents as a prospective allottee on 21.12.1982 after duly depositing the registration amount of Rs. 1,500/- only; that although all the members of the Scheduled Castes and Schedule Tribes and 40% of the members belonging to the Other Backward Classes and the Government employees (to which class the appellant claimed to be belonging) were allotted houses in the scheme at the concessional rate of Rs. 30,000/-, but no house at the relevant time was allotted to him, that had he been included in the draws of lottery held subsequently, he would have got a house for Rs. 60,000/- only, but that was also not done in the case of the appellant; that by their letter dated 24.9.1991 the respondents required the appellant to deposit the seed-money amounting to Rs. 16,400/- in three instalments and the appellant duly and timely deposited all the three instalments; that by their letter dated 9.9.1992 the respondents allotted House No. 18 E/443 to him in "Chaupasni Yojna" and required him to deposit Rs. 56,153/- before taking possession of the house and then to pay the balance amount of the cost of the allotted house in 168 monthly instalments of Rs. 1,214/- each; that although the appellant duly deposited the demanded amount of Rs. 56,153/- but then he was arbitrarily and unjustly required to furnish guarantee bonds of Rs. 2 lakhs and that although the respondents had assured and promised to allot to the appellant a two room house on a plot admeasuring 7.5 x 15 mtrs. = 122.5 sq. metres for Rs. 30,000/- only, but vide allotment order dated 9.9.1992 he was offered allotment of a house on a plot admeasuring 6.15 x 14.73 mtrs. = 90.59 sq. metres at a cost exceeding Rs. 3 lakhs. It was on these facts and under such circumstances that the appellant filed his complaint praying that if the house cannot be allotted to him, in accordance with the scheme, under which he was required to be allotted and other low paid employees like him were allotted house in the past, his money be returned to him with interest @ 24% p.a. besides cost and compensation. In its reply filed by the respondents it was admitted that the appellant had got himself registered with it under General Allotment Scheme, 1982 for allotment of a house of M.I.G. (A) Category, that although the appellant was Govt. servant for whom the reservation was 40% of the houses to be constructed in that Scheme but the appellant was also a member of Other Backward Classes for whom there was reservation of 14% only and the appellant had opted for reservation on the basis of his being member of the OBC, he was registered accordingly. The allegations regarding deposit of the three instalments of seed money and thereafter the sum of Rs. 56,153/- by the appellant with the respondent were not specifically denied. Similarly demanding a guarantee bond of Rs. 2 lakhs was not specifically denied. What was stated by the respondent in that behalf was that the appellant had simply made wild and wrong allegations and that the respondent was legally competent to charge such amounts also which are not mentioned in the demand letter. Such items of expenditure were specified as ASC, Patta Rashi, rent deposit amount, fire insurance policy etc. etc. (Para 4 of the reply). Anyway, it was asserted in Para No. 11 that the respondent was legally competent to charge the increased cost of land/house and to re-schedule the instalments payable by the allottees of the houses under the Hire - Purchase Scheme. In Para 13 it was also asserted that since the respondent has to obtain loans from Financial Institutions to construct houses for needy public and to sell such houses to them on no profit - no loss basis, it ordinarily charges interest @ 24% p.a. plus penalty from such allottees who commit default in making payment of the seed money, instalments etc. In the end it was submitted that in case appellant wants to take a house from the respondent, he should deposit all the outstandings as per rules of the scheme or he may receive his money back after deduction as per rules.

The District Forum held that since the cost of construction, the area of the allotted house and the price demanded by the respondent from the appellant were under challenge in the complaint and thus a challenge to the costing principles and pricing policy has been given, which cannot be gone into by the Forum, within its limited summary jurisdiction, the appellant may approach a Civil Court for redressal of his grievance, if any.

IN the course of arguments in this appeal on 16.4.2002 we enquired of the parties if their dispute might be settled by delivery of the possession of the allotted house. The learned Counsel for the respondent was fair enough to state that the respondent may deliver the possession of the allotted house to the appellant in a habitable condition provided he pays the outstandings as per rules. The appellant was hesitant to take delivery of the house on the ground that the respondent would press for payment of interest on unpaid instalments and also penalty. The learned Counsel for the respondent submitted that the Deptt. was presently allowing discount at 40% in the payment of arrears of interest. IN order to facilitate the parties to shorten their dispute we directed that the appellant, if he so liked, may take possession of the allotted house within a period of one month. The respondent was directed to deliver the possession of the house, after making it habitable. Our efforts to solve the dispute in the above manner, failed for the reason that the respondent insisted upon charging interest on the arrear of the unpaid instalments and penalty and the appellant could not prepare himself to undertake to discharge such liability. We, therefore, completed the arguments on subsequent dates of hearing.

THE facts, narrated above, speak for themselves and we need not repeat them once again. Suffice it to say that a low paid Government servant, getting a meagre salary of Rs. 601/- p.m., got himself registered with the respondent for allotment of residential house in M.I.G. (A) Category of the scheme of the respondent and although he timely deposited all the moneys, as were demanded from him, and was also allotted a house after about a decade of his registration but the possession thereof was not delivered to him for another decade for one reason or the other. THE reason for non-delivery of the possession of the allotted house to the appellant has been that the appellant did not pay the monthly instalments with the interest fallen due and penalty imposed for the commission of default by him in paying the instalments by the due dates, as also other ancillary and misc. charges like ASC, Patta Rashi, rent deposit amounts. Little is realised by the public or private bodies, carrying on construction activities and proclaiming and professing to provide residential houses to the needy people under Hire-Purchase System on no loss - no profit basis, that liability to pay monthly instalments, with or without incurring further liability to pay interest and/or penalty resulting from their acts of omission or commission, would arise only after putting the allottee/prospective buyer in actual and physical possession of the allotted/sold house. When such a business-activity is undertaken by the State with the avowed object of solving the housing problem of a large number of its people, particularly of those who hail from the poorer section of the society, it becomes its duty to be sensitive to the needs of such less-privileged persons and to timely provide a shelter to them. By making payment of the seed money and other amounts, as and when demanded by such undertaking, the prospective buyer performs a part of the contract, which part was there on him. In equity, good conscience and fair play and also in the spirt of the contract between them, the undertaking is required to perform its part-under such contract by making delivery of the goods to the prospective buyer or putting him, in physical possession of the goods intended and agreed to be sold to him. The very concept of acquisition of immovable property through the mode of "Hire Purchase" system is against the receipt of periodical instalments of the balance amount of consideration from the purchaser without first putting him into actual and physical possession of the property sold. Much before making himself entitled to obtain the possession of the sold property, the prospective buyer parts with a substantial part of his precious money in the fond hope of getting possession of the proposed property at some future point of time. What he gets in return is simply a "promise" which is seldom timely honoured. And when the time to honour the promise comes he obtains possession with the added liability in the form of instalments, which ordinarily include the element of interest. It can hardly be denied that whatever amount the Housing Society or Board pays by way of interest on loans borrowed from other financial institutions is charged from the purchasers of the houses under the Hire Purchase System. In addition to realising such amount of interest from the buyers, they charge from him interest at increased rates, with or without penalty, in the event of his committing default in paying the periodical instalments timely. In substance, the obligation to pay periodical instalment of the balance amount under Hire Purchase System of sale and purchase of goods would arise only after the buyer has been put in possession of the property sold. The liability to pay interest and penalty on the amounts of un-paid instalments would arise on the commission of default by the buyer in paying the instalment by the specified time, subsequent to his having been put in physical possession of the goods by the seller. Acquisition of goods under a Hire Purchase Scheme cannot be equated with the winning of a priced article of goods in the draw of lottery under a Chit Fund Scheme whereunder the winner is required to pay periodical instalments until he wins the priced article. In the instant case, since the appellant was not put in possession of the allotted house despite his paying the seed money of Rs. 16,400/- and further amount of Rs. 56,153/- a decade ago, he cannot be required to pay any amount either on account of upaid instalments or on account of interest accrued and/or penalty imposed for his not paying the instalments. The respondent did not produce any iota of evidence relating to the priority of applicants in the scheme, draws of lotteries held for allotment of the constructed houses, demands raised and made against the appellant and his failing to deposit such demand. Consequently we hold that the respondent rendered deficient services to the appellant in the matter of delivery of possession of the allotted house to him. In the result the impugned order is set aside and this appeal is allowed in the following manner : (1)(i) The respondent would deliver the possession of the allotted house to the appellant, in habitable condition, within a period of three months from the date of service of this order on them, without requiring him to pay any amount on account of arrears of so-called unpaid instalments and/or on account of interest and penalty relating to such unpaid instalments. (ii) At the time of delivery or possession of the allotted house to the appellant the respondent would re-schedule the 168 monthly instalments, the first payable at the time of delivery of possession and the second after the expiry of thirty days of the payment of first instalment and thereafter so on and so forth. Interest and penalties, if any, would be payable only in the event of appellant''s committing default in making payments of the periodical instalments, which are to be re-scheduled by the respondent in pursuance of/under this order. (2) In case the above arrangement is not acceptable to either of the parties and is not carried out within the period specified above the respondent shall refund and pay to the appellant the following amounts before the expiry of four months from the date of this order. (i) Refund of the Registration amount (after deduction of 20% of the such amount) with interest as admissible under the Scheme. (ii) Rs. 16,400/- + Rs. Rs. 56,153/- with interest @ 9% p.a. from the dates of deposit of those amounts. (iii) Rs. 5,000/- as cost of litigation. (3) In case the above amounts are not paid to the appellant within the aforesaid period through Demand Draft either deposited with the Distt. Forum with notice to the appellant through Registered Post A.D. or sent to him by Registered post A.D. at the address given by him in the complaint, the aforesaid amount would carry interest @ 12% p.a. from the dates specified against them. (4) The Rajasthan Housing Board shall not be made to suffer for the loss caused and expenditure incurred in connection with this litigation. It shall reimburse itself for such loss and expenditure from the delinquent and erring officials/officers who shall be identified by the Head of the Department of the respondent Board by holding a prompt inquiry into the matter.

Appeal disposed of.