Mohan Singh vs CHANDIGARH ADMINISTRATION

WE propose to dispose of two complaints Mohan Singh & Ors. v. Chandigarh Administration and Others (Complaint No. 13 of 1998) and Rakesh Budhiraja and Others v. Chandigarh Administration & Ors., C.C. No. 47 of 1998, relating to the residential plots in Sectors 33A and 10, other complaints such as Kanwaljit Singh Kochhar & Anr. v. Chandigarh Administration & Ors., C.C. No. 20/1998; Harpreet Singh Giani & Ors. v. Chandigarh Administration & Anr., C.C. No. 42/1998; Ajay Kumar & Anr. v. Chandigarh Administration & Ors., C.C. No. 51/1998; Krishan Kumar v. Chandigarh Administration & Ors., C.C. No. 52/1998; Krishan Kumar v. Chandigarh Administration & Ors., C.C. No. 65/1998; Satish Kumar & Ors. v. Chandigarh Administration, C.C. No. 66/1998; Madan Gopal Aggarwal v. Chandigarh Administration, C.C. No. 67/1998; Dr. Pawan Gupta & Ors. v. Chandigarh Administration & Ors., C.C. No. 75/1998), Bir Bhan & Ors. v. Chandigarh Administration & Ors., C.C. No. 78/1998; and Vijay Khurana v. Chandigarh Administration & Ors., C.C. No. 79 of 1998, relating to commercial plots located in Sector 39C, Sector 40D and Industrial Area, Chandigarh. Since questions of fact and law are same all these shall be disposed of by this order.

MOHAN Singh, Bhag Singh and Baljinder Singh all sons of Shri Jagir Singh residents of Chandigarh purchased plot No. 36 (P) Sector 33A, Chandigarh on lease hold basis in an open auction held on 17.12.1997 for a sum of Rs. 26,25,000/-. A sum of Rs. 6,56,250/- being 25% of price was deposited at the time of auction. The remaining price was payable by means of annual instalments. The next instalment was payable on 17.12.1998 and it was to the tune of Rs. 7,91,654/-. It has been alleged that the complainants were unable to raise construction on account of grave deficiencies on the part of respondents. The pleas taken up for inability to start construction are as under : 1. want of approach road; 2. the requirement of drinking water supply lines; Want of sewerage at the site;

Want of rain water drainage system;

THE requirement of street light; and The requirement of plinth level to enable The complainants to start construction. The relief claimed is as under : (i) Respondents may be directed to provide The basic amenities mentioned at Sr. Nos. 1 to 6 above. (ii) Respondents may also be restrained from charging The instalments and interest on The balance price till The plinth level of The plot is provided. (iii) Complainants may be awarded compensation to The tune of Rs. 10.00 lacs on account of harassment without any fault of Theirs.

The pleas raised on behalf of Chandigarh Administration were that The complaint was not covered under The definition of ''Service''. AnoTher preliminary pleas was that in Ajit Singh v. Chandigarh Administration, The Punjab and Haryana High Court observed that approach in respect of payment of Government dues should always be lamented and not that The complainant should find out excuses for non-fulfilment of The conditions. The jurisdiction of Civil Court was also barred under The Capital of Punjab (Development and Regulation) Act, 1952. On facts it was averred that public roads, street lights etc. may be provided during The course of development. The sites were earmarked by The Engineering Department for auction. It was open to The bidders now complainants to make or not to make The bid. The respondents were not responsible for levelling of uneven sites. It was denied that it was essential to provide all These amenities at The time of allotment though made as a consequence of auction. The complainants are not adopting tactics to delay The payment.

The Municipal Corporation also filed a written reply wherein it has mainly been averred that The answering respondent was not aware regarding The said auction and was never informed to carry out any development such as, providing basic amenities for The said plot(s) purchased by The complainants on lease hold basis. It only came to The notice of The Municipal Corporation in June, 1997 that The basic amenities in The locality were non-existent. The Municipal Corporation came into existence on 1.6.1996 and since Then it has not received any communication from The Estate Officer regarding provision for sewerage, rain water, drainage system, roads etc. Now after having received information, The survey of The area has been conducted, estimates for providing aforesaid facilities have been prepared and The required amenities will be provided as and when The Administrative approval in respect of funds is received.

The affidavit filed by Mohan Singh one of The complainants dated 8.9.1998 and oTher complainants in The connected complaints remained unrebutted so far as questions of fact are concerned and it establishes that in all These cases The respondents acted in haste and auctioned various plots residential as well as industrial, without providing or arranging even The basic amenities. It was unfair on The part of The respondents to auction a kind of Jungle on fabulous prices and to consider The requirement of basic amenities long after collection of lacs of rupees from Mohan Singh and oTher complainants. Similar is The position in respect of commercial plots enumerated above. Ajit Singh & Ors. v. Chandigarh Administration,C.W.P. No. 9503 of 1996, decided by Punjab and Haryana High Court on 29.8.1996 pertaining to The auction of commercial sites which were auctioned in 1983, approximately 13 years earlier and it appears that in The aforesaid case The successful bidders had not deposited even The first instalment. Besides this in The aforesaid case it appears that condition of The site, its fitness for construction and several oTher allegations made as in The cases now in hand were not under consideration. The Municipal Corporation has not controverted The questions of fact here. The learned Counsel for The complainant has drawn our attention to Lucknow Development Authority v. M.K. Gupta, decided on 5.11.1993 and The law laid down in The aforesaid case has not been repelled here. The definition of ''Service'' has been considered and laid down in this case which should guide various statutory bodies who claim that They are providing land for building dwelling units or even for setting up commercial units on lease hold basis only. It has been observed in The aforesaid case that The public authority entrusted with statutory functions cannot act negligently. It has furTher been observed that The Consumer Protection Act opts for wider definition. An important part is reproduced as under : "Similarly when a statutory authority develops land or allots a site or constructs a house for The benefit of common man it is as much service as by a builder or contractor. The one is contractual service and oTher statutory service. If The service is defective or it is not what was represented Then, it would be unfair trade practice as defined in The Act. Any defect in construction activity would be denial of comfort and service to a consumer. When possession of property is not delivered within stipulated period The delay so caused is denial of service. Such disputes or claims are not in respect of immovable property as argued but deficiency in rendering of service of particular standard, quality or grade. Such deficiencies or omissions are defined in Sub-clause (ii) of Clause (r), Section 2 as unfair trade practice."

After going a little deep through The aforesaid authority it is not feasible to accept The contention that The respondents were sovereign or that The deficiency which has resulted from The time of auction and continues till now cannot be looked into or that The respondents are not accountable. Some time back we had The occasion to deal with several such cases while deciding Kanwaljit Singh Jolly v. Chd. Administration, Complaint No. 9 of 1998 decided on 10.3.1999 and The respondents were held liable.

MR. K.L. Goel, learned Government Pleader representing the Chandigarh Administration has drawn our attention to the decision in Sukhpal Singh Kang & 19 Ors. v. Chandigarh Administration & Anr., C.W.P. No. 3370 of 1992, and an attempt has been made to stress that the allottees who purchased the plots in an auction held on 25.2.1990 remained unsuccessful when their writ was decided by the Punjab and Haryana High Court on 16.10.1998. A perusal of the aforesaid judgment shows that the Chandigarh Administration in those writs gave a written assurance that the amenities which remained unprovided shall be made available by the end of 1999. The petitioners in the aforesaid connected writs are also likely to receive the benefit of important observations of the Division Bench of the High Court that the Competent Authority shall consider exemption of interest at a higher rate mentioned in auction proceedings. Thus we do not agree with the contention of the learned Counsel for the respondents that C.W.P. No. 3370 of 1992 and other writs disposed of by the same judgment were totally dismissed or that the Chandigarh Administration was not held liable. It appears that the Lucknow Development Authority v. M.K. Gupta, under the Consumer Protection Act, 1986 decided by the Supreme Court on 5.11.1993 was not brought to the notice of the High Court when the aforesaid two writ petitions were under consideration. Besides this the issues raised here regarding ''Service'' etc. were not under consideration there. Though the auction was made on 17.12.1996, yet in para 5 of the affidavit filed by the Estate Officer, Union Territory, Chandigarh dated 13.1.1999 it has been mentioned that generally basic amenities are provided during the course of development of a Sector, but we find that even after three years the essential amenities have not been provided. There is an affidavit of Shri Manmohanjit Singh, Superintending Engineer of Municipal Corporation, Chandigarh dated 24.11.1998 wherein it has been mentioned that it was some time in June that it was brought to the notice of the answering respondent regarding non-existence of the basic amenities in the locality. Before this no correspondence was communicated to the answering respondent regarding non-existence of basic amenities in the locality. As soon as the said fact was brought to the notice of the answering respondent, estimates for providing the basic amenities i.e. sewerage system, drainage of storm water, roads etc. have been prepared and forwarded to the higher authorities for seeking administrative approval. We find that this transaction dated 27.12.1996 notwithstanding that it was by auction was not sale within the meaning of Section 54 of the Transfer of Property Act, 1882 because in a sale there is absolute transfer of all rights in the property sold. In the present transactions the right of reversion is there. Since the respondents possessed the right of reversion they were also legally bound to ensure that the plots auctioned at a fabulous price in question were fit for occupation and construction. As seen above, since there are deficiencies and the complainants are held to be consumers, they have the right to seek redressal under the Consumer Protection Act, 1986. We are of the view that the observations made in Lucknow Development Authority v. M.K. Gupta (supra), go in favour of the complainants. At the same time the respondents monopolists themselves had the means, machinery and authority to render the plots fit for occupation by the complainants/consumers. After considering all these facts we are of the view that the respondents auctioned the plots in question and collected huge sums knowing that these were not at all fit even for delivery of possession much less construction. After going through the replies and affidavits of the respondents there appears to be no doubt that the facts and circumstances are distinguishable from those which came to the notice of the High Court of Punjab and Haryana in Sukhpal Singh Kang and 19 Others instituted in the year of 1992 and decided on 16.10.1998. The learned Counsel for the complainants has pointed out that in the aforesaid writs it came to the notice that one of the petitioners was running Whimpi Restaurant on a Shop-cum-Office; in a few other cases the premises were built and leased out in September, 1993 to the L.I.C., Wipro, Bank of Punjab etc. etc. or in other words some writ petitioners were reaping some benefit of their investment whereas the factual position as admitted in the written replies in the present cases is quite contrary. Since the respondents sold by auction a plot measuring about 243.75 sq. yards for Rs. 26,25,000/- on 17.12.1996, the respondents were required to ensure that the complainants shall be able to actually utilise land soon after the auction. It is doubtful that the old plea that the House Building Societies or the respondent monopolists are entitled to a period of three years or even more for development of land can have the authenticity of the so called doctrine in such cases which are under consideration here. It is only in the case of a sale that the vendor may not owe any liability once he transfers a piece of land to a vendee for consideration except if his own title is challenged. In the present cases it was a lease. The various terms and conditions of the lease are mainly given in paras 5 and 9 of the letter of allotment dated 19.2.1997 (Annexure C-5). The terms and conditions for annual ground rent for the period of first 33 years are mentioned in para 5 and other relevant conditions are in para 9(a). In such cases the lessor remains liable qua the lessee to ensure that the piece of land was really fit for the purpose it has been let out to the lessee by an auction in their own office premises and not at or even near the site. In all these cases we are of the view that the respondents who have and are expecting the remaining part of consideration i.e. the lease money etc. are not free from the reasonable duties and liabilities they owe to a consumer.

AFTER considering all the facts and the present law referred to above we hold that Complaint No. 13 of 1998 and other connected complaints enumerated above succeed. We hereby hold that the date of auction for the purpose of payment of price shall be deemed to be date on which plinth level and all the basic amenities demanded in the complaint are actually provided. The amount deposited by the complainants shall earn interest @ 18% p.a. till providing the essential requirements referred to above. We hereby order that let an officer of the rank of Chief Engineer of Union Territory Chandigarh or a person next below him certify that the plinth level as well as other basic requirements/amenities are provided. The date of such certificate shall be considered to be the date of auction. It is further ordered that interest on the outstanding amount shall be payable from the date the aforesaid certificate is issued. The instalments shall be rescheduled accordingly in each case and the remaining price of the plots shall be deposited after rescheduling the instalments without any change in the price offered at fall of hammer. We further order that the lease money shall be payable from the date of certificate mentioned above. The respondents are also ordered to pay costs Rs. 3,000/- in each of the above mentioned complaint.

AS regards Complaint No. 42 of 1998, Harpreet Singh v. Chandigarh Administration, there is another important feature. The possession of Plot No. 227, Sector 40D originally auctioned could not be delivered to complainant because it was already auctioned to some other person. Subsequently an alternative plot was allotted to the aforesaid petitioner on 28.2.1994. In this case besides the relief being given here by this Commission to other complainants referred to above the complainants in this case are also held entitled to interest @ 10% per annum on the sum of Rs. 3,35,000/- from date of deposit till they were provided alternative plots failing this payment within a period of two months, the complainants in this case shall be entitled to interest @ 18% per annum from the date of institution of complaint till realisation. Complaints disposed of.