U. P. Avas Evam Vikas Parishad vs Shiv Shankar Lal Shukla

THIS revision petition is directed against the order dated 12th August 2010 of the Uttar Pradesh State Consumer Disputes Redressal Commission, Lucknow (in short, the State Commission) in Appeal no. 1383 of 2010. By this order, the State Commission upheld the order of the District Consumer Disputes Redressal Forum, Kanpur Nagar (hereafter, the District Forum) in complaint case no. 347 of 2009 by observing inter alia as under: The impugned judgment dated 07.07.2010 of the District Consumer Forum, Kanpur Nagar passed in complaint case no. 37 of 2009 has been subjected to challenge by the appellant U. P. Avas Vikas Praishad solely on the ground that the discretion exercised by the Housing Commissioner has not been given due recognition. Coming to the authority of the Housing Commissioner to cancel the highest bid of the complainant, we find from perusal of G.O. No. 738/9 A-1-97-30 D.A/97 Aavas Section 1 dated 6th February 1997 that the government having felt concerned upon repeated cancellation of auction sales, issued detailed instructions for the Housing Commissioner not to interfere with the auction proceedings and the highest bid held in accordance with the terms and conditions of the auction sale. For better understanding the G.O. may be quoted as below- Despite predetermining the reserved price for Auction of a property belonging to Avas Evam Vikas Parishad and Development Authorities, reports of several incidents have received by the Government that despite receiving bids/ tender valued higher than the reserved price, some officers either delay in giving approval to the auction proceedings on one pretext or the other OR include the said property in the next auction proceeding due to personal reasons and later they express their opinion to the effect that the bid/offer received in the latter auction was higher than the bid /offer received in the earlier proceedings and, therefore, it shall not be in the interest of the organization to approve the bid/ offer. On the contrary, after analysis of these incidents, these arguments have been found to be incorrect and against the principles of natural justice. A fair competition in a Public Auction can be seen only if the highest bidder gets the property in question and it is quite unfair to promote the culture where the highest bidder, despite quoting the higher bid, is looking for the mercy of the discretionary powers of a particular Authority. Therefore, with a view to stop such kind of practice and to bring transparency in the auction proceedings and to crackdown corruption in the process, I have been directed to say that it is irrelevant to dispose off any property against a value quoted below the reserved price on the one hand and on the other hand no officer is having right/ power to use discretionary power in rejecting a bid valued higher that the reserved price for the property. It does not mean that the Authority has not power to interfere in those Auction proceedings where it is suspected that the bidders are either working in connivance of each or some dummy bidders are participating in the auction proceedings. In such situations, a decision should be taken within a day after the auction was held, while indicating the reasons to do so. Therefore, please ensure strict compliance of the aforesaid guidelines in the all future public auction proceedings. A careful perusal of the above G.O. would reveal that the excuse of dummy bidders on the part of the authority issuing cancellation has also been taken care of and discouraged. In the case in hand, learned counsel for the Avas Vikas Parishad submitted that there were only two bidders when the plot in question was put to auction sale but the Parishads own letter dated 04.07.2009 referred to earlier clearly spells out that there as many as four bidders who had participated in the auction bid and their names are as follows: Sri Kapil Misra Sri Shiv Shanker Shukla Sri Anurag Sri Sudhir Singh

Obviously, thus, contention of there being only two bidders and one of them being a dummy bidder is ruled out on the fact of the above letter. Moreover, the decision by the Commissioner was kept in abeyance for more than two months without any rhyme or reason. The G.O. of 6th February 1997 referred to above clearly postulates that if an auction bid as to be cancelled, decision should be taken within one day.

I have heard Mr. Vishwajit Singh, learned counsel for the petitioners and Mr. K.P. Sunder Rao, learned counsel for the respondent/complainant (Caveator) and have carefully considered the documents placed on record. The revision petition has been filed with a delay of 15 days and an application seeking condonation of delay has also been filed. Mr. Rao does not oppose the application for condonation of delay. For the reasons recorded in the application, the delay is thus condoned.

The main point which Mr. Singh emphasised was that the plot of land in question was auctioned by the petitioner for which the respondent/complainant was the highest bidder. Relying on the ratio of the judgment of the Apex Court in UT Chandigarh Administration and Another vs Amarjeet Singh and Others [(2009) 4 Supreme Court Case 660], Mr. Singh argued that the dispute would not fall within the purview of a consumer dispute in terms of section 2(1)(e) of the Consumer Protection Act, 1986 (in short, the Act) nor would the respondent qualify as a consumer under the definition in section 2 (1) (d) of the Act. Hence, both the District Forum and the State Commission exceeded their jurisdiction in dealing with the matter and the revision petition ought to be allowed on this ground alone. He specifically drew attention to the following paragraphs of the above-mentioned judgment of the Apex Court: 18. The decision in LDA and GDA make in clear that where a public development authority having invited applications for allotment of sites in a layout to be formed or for houses to be constructed and delivered, fails to deliver possession by forming the layout of sites or by constructing the houses within the stipulated period, the delay may amount to a deficiency in service by treating the development authority as a service provider and the allottee as the consumer. But where existing sites are put up for sale or lease by public auction by the owner, and the sale/lease is confirmed in favour of the highest bidder, the resultant contract relates to sale or lease of immovable property. There is no hiring or availing of services by the person bidding at the auction. Nor is the seller or lessor, a trader who sells or distributes goods. The sale price or lease premium paid by the successful bidder of a site, is the consideration for the sale or lease, and not consideration for any service or for provisions of any amenity or for sale of any goods.

Where there is a public auction without assuring any specific or particular amenities, and the prospective purchaser/ lessee participates in the auction after having an opportunity of examining the site, the bid in the auction is made keeping in view the existing situation, position and condition of the site. If all amenities are available, he would offer a higher amount. If there are no amenities, or if the site suffers from any disadvantages, he would offer a lesser amount, or may not participate in the auction. Once with open eyes, a person participates in an auction, he cannot thereafter be heard to say that he would not pay the balance of the price/ premium or the stipulated interest on the delayed payment, or the ground rent, on the ground that the site suffers from certain disadvantages or on the ground that amenities are not provided.

With reference to a public auction of existing sites (as contrasted from sites to be formed), the purchaser/ lessee is not a consumer, the owner is not a trader or service provider and the grievance does not relate to any matter in regard to which a complaint can be filed. Therefore, any grievance by the purchaser/ lessee will not give rise to a complaint or consumer dispute and the fora under the Act will not have jurisdiction to entertain or decide any complaint by the auction-purchaser/ lessee against the owner holding the auction of sites.

ON the other hand, Mr. Rao, learned counsel for the respondent/ complainant argued that the respondent was very much a consumer. The service promised to be rendered by the petitioner was confirmation/acceptance of the complainants highest bid, latest within one day after the auction. This was mandatory under the Government of Uttar Pradesh letter no. 738/Aa1-97-30.D.A./97 dated 6th February 1997, referred to specifically by both the District Forum as well as the State Commission in their orders. The price of the plot of land, as offered by the respondent/complainant (or, even the reserve price fixed by the petitioner) clearly included the consideration for the plot as well as that for the entire gamut of services to be provided or promised to be provided by the petitioners inasmuch as, by their own admission, the petitioner Parishad, a statutory body set up under an Act of the State of UP, was run on no-profit no-loss basis. In other words, the total cost of the plots of land or ready-built flats/ houses as well as the infrastructural facilities, on the one hand and the salaries and other administrative costs of various associated services provided by the petitioner, on the other was being recovered by way of the price charged from the purchasers/ allottees of these plots/ flats/ houses. I am inclined to agree with Mr. Rao. The view canvassed by Mr. Singh, learned counsel for the petitioner would appear plausible in the first flush. On a more careful consideration, however, it is obvious that the facts of this case ought to be distinguished from those in the case of UT Chandigarh Administration and Another vs Amarjeet Singh and Others referred to above. In the UT Chandigarh Administration case, the dispute/grievance of the successful bidders in the auction of the sites in question related to non-provision of basic amenities by the UT Administration, although it was stated in clause (vi) of the general terms and conditions of the auction, Government would not be responsible for leveling uneven sites. On the other hand, the grievance in this case did not relate to non-provision of amenities or developmental services relating to the housing plot in question. It merely related to deficiency in service consisting of rejection of the highest bid of the respondent/complainant on a ground which was not at all mentioned in the notice for auction and which ran entirely contrary to the State Governments specific instructions on the subject to the Parishad. Non-acceptance of the highest bid of the respondent/complainant on a ground which was not a condition precedent of the auction would prima facie constitute both deficiency in service and unfair trade practice. Further, non-observance of the statutory directions of the Government of UP to the Housing Parishad as contained in the above-mentioned letter dated 6th February 1997, would amount to negligence per se on the part of the petitioner in view of the discussion in paragraph 42 of the Apex Court judgment in Poonam Verma v Ashwin Patel and Others [(1996) 4 SCC 332] which reads as under: 42. Negligence has many manifestations it may be active negligence, collateral negligence, comparative negligence, concurrent negligence, continued negligence, criminal negligence, gross negligence, hazardous negligence, wilful or reckless negligence, or negligence per se, which is defined in Blacks Law Dictionary as under: Negligence per se Conduct, whether of action or omission, which may be declared or treated as negligence without any argument or proof as to the particular surrounding circumstances, either because it is in violation of a statute or valid municipal ordinance, or because it is so palpably opposed to the dictates of common prudence that it can be said without hesitation or doubt that no careful person would have been guilty of it. As a general rule, the violation of a public duty, enjoined by law for the protection of person or property so constitutes.

IN this view of the matter, the revision petition is dismissed, with no order as to costs.