Case Law Details
Urban Improvement Trust Vs Magha Ram (NCDRC Delhi)
Conclusion: In present facts of the case, while relying upon the Judgment of Supreme Court it was held that auction purchaser could not be held to be a ‘consumer’ and the lower for a do not have Jurisdiction to entertain issues pertaining to auction.
Facts: In present facts of the case, the revision petition have been filed under section 19 of the Consumer Protection Act, 1986 assails the order dated 02.02.2017 in First Appeal no. 238 of 2013 of the State Consumer Disputes Redressal, Delhi.
The Petitioner published an advertisement notifying sale by auction of residential plot in Bikaner on 27.04.1970. Respondent’s father made the highest bid of Rs. 11,960/- which was accepted by the petitioner. Respondent deposited 25% of the bid amount of Rs.2990/- as part payment of the total sale consideration amount of Rs. 11,960/-. On 09.12.1970 petitioner informed the respondent that a ‘stay’ order had been issued by the court qua the plot auctioned in his favour and that once this order was vacated, he would be informed by way of demand notice to deposit the balance consideration amount. On 09.03.1971 a demand notice was sent by the petitioner to the respondent to pay the balance amount along with the lease amount totalling to Rs.9004.30/- within one month from the date of receipt and that failure to do so would amount to automatic cancellation of the auction including forfeiting the amount paid. As the respondent failed to deposit the balance amount, on 17.07.1971 petitioner cancelled the allotment and the respondent’s father was informed of the cancellation when he visited the office of the petitioner. A letter dated 23.08.1971 was sent by respondent’s father for return of the amount deposited which was Rs.2990/-. On 29.10.1982 respondent’s father Ratan Lal expired. The plot in question had been sold through auction by Petitioner on 26.05.1998. The respondent therefore, does not have any title qua the property in question.
In view of copy of decision dated 03.07.2003 a Compromise Committee was setup by petitioner wherein it was held that complaint of the respondent was time barred since more than 33 years had passed from the date of auction. The matter was transferred to the State Government on 03.07.2003. On 15.10.2005 the decision of the Compromise Committee was reiterated by the petitioner. Aggrieved by the said orders, respondent filed Consumer Complaint in District Forum on 14.09.2005 alleging deficiency in service. The District Forum upheld the complaint and directed the petitioner to allot an alternate plot of the same size as was previously allotted within 3 months and pay Rs. 1000/- as compensation.
An appeal was filed by the petitioner before the State Commission, which was dismissed.
Before the National Commission, the petitioner contended that late Ratan Lal was not a ‘consumer’ as the property was purchased through auction. Therefore, the consumer fora do not have jurisdiction to entertain the complaint. Reliance was placed upon the Judgment of Hon’ble Supreme Court in U T Chandigarh Administration & Anr. Vs. Amarjeet Singh & Ors. (2009) 4 SCC 660, wherein it was held as under:
“14. …………….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 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.”
The National Commission after taking submissions of both sides observed that in view of the settled law in regard to an auction purchaser not being entitled to be treated as a ‘consumer’ under the Act, the lower fora have certainly acted without jurisdiction in entertaining and adjudicating in this matter in the Consumer Complaint and First Appeal respectively.
Therefore, the revision petition was found to have merits and was allowed.
FULL TEXT OF THE ORDER OF NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION DELHI
1. This revision petition under section 19 of the Consumer Protection Act, 1986 (in short, the ‘Act’) assails the order dated 02.02.2017 in First Appeal no. 238 of 2013 of the State Consumer Disputes Redressal, Delhi (in short, the ‘State Commission’) which dismissed the appeal against order dated 30.07.2007 of the District Consumer Disputes Redressal Forum, New Delhi (in short, the ‘District Forum’) in Consumer Complaint no. 254/2005 that had allowed the complaint filed by the respondent.
2. I have heard the learned counsel for both the parties and perused the material on record carefully.
3. According to the petitioner the facts of the case are that it published an advertisement notifying sale by auction of residential plot no. C-78, Sardulganj scheme, Bikaner admeasuring 5974 sq. ft on 27.04.1970. Respondent’s father made the highest bid of Rs. 11,960/- which was accepted by the petitioner. Respondent deposited 25% of the bid amount of Rs.2990/- as part payment of the total sale consideration amount of Rs. 11,960/-. On 09.12.1970 petitioner informed the respondent that a ‘stay’ order had been issued by the court qua the plot auctioned in his favour and that once this order was vacated, he would be informed by way of demand notice to deposit the balance consideration amount. On 09.03.1971 a demand notice was sent by the petitioner to the respondent to pay the balance amount along with the lease amount totaling to Rs.9004.30/- within one month from the date of receipt and that failure to do so would amount to automatic cancellation of the auction including forfeiting the amount paid. As the respondent failed to deposit the balance amount, on 17.07.1971 petitioner cancelled the allotment and the respondent’s father was informed of the cancellation when he visited the office of the petitioner. A letter dated 23.08.1971 was sent by respondent’s father for return of the amount deposited which was Rs.2990/-. On 29.10.1982 respondent’s father Ratan Lal expired. A Will was executed by respondent and an Agreement to Sell was executed between the respondent and other legal heirs of late Ratan Lal. However, the plot in question had been sold to one Satyendra Kumar through auction by petitioner on 26.05.1998. The respondent therefore, does not have any title qua the property in question.
4. In view of copy of decision dated 03.07.2003 a Compromise Committee was setup by petitioner wherein it was held that complaint of the respondent was time barred since more than 33 years had passed from the date of auction. The matter was transferred to the State Government on 03.07.2003. On 15.10.2005 the decision of the Compromise Committee was reiterated by the petitioner.
5. Aggrieved by the said orders, respondent filed Consumer Complaint no. 254/2005 before the District Forum on 14.09.2005 alleging deficiency in service on the part of the petitioner and praying for allotment of plot no.B-44 in place of plot no.C-78 with compensation of Rs.20,000/-. The District Forum upheld the complaint and directed the petitioner to allot an alternate plot of the same size as was previously allotted within 3 months and pay Rs. 1000/- as compensation. The order of the District Forum dated 30.07.2007 reads as follows:
(i) That any other plot of the size of plot no. C- 78 of Sardulganj, Bikaner in the said colony be provided to the complainant at the rate of 27.04.1970 and if the plot of the same size is not available in the said colony, then any other plot of the same size in any other developed colony be provided to the complainant at the prevalent rate of 27.04.1970. The opposite party is at liberty to receive remaining 3/4th amount from the complainant along with interest as per rules of the trust;
(ii) If there is any difference in the size of plot, then the opposite party would be entitled to receive price of the differential land from the complainant at the present trust rate;
(iii) The opposite parties are ordered to pay Rs.500/- towards complaint cost and Rs.500/- towards compensation to the complainant, thus additional total sum of Rs.1000/- be provided;
(iv) The above order will be complied with by the opposite parties within a period of three months; and
(v) The complaint is dismissed relating to other reliefs.
6. An appeal was filed by the petitioner before the State Commission in Appeal No. 238/2013. On 30.11.2015 a contempt application was filed by respondent alleging noncompliance of judgment dated 30.07.2007. Subsequently on 23.01.2017 an impleadment application was filed by Satyendra Kumar on the ground that the property in question was purchased by him by way of an agreement dated 25.05.1993 from the legal heirs of Shri Ratan Lal. On 02.02.2017 the State Commission held that the petitioner erred in informing the respondent about the cancellation and the amount deposited by the respondent should have been returned to him with interest. The order of the State Commission reads as follows:
“It is an admitted fact that Urban Improvement Trust had advertised the auction of the disputed sale. It is also admitted fact that Ratan Lal, father of the complainant, was the highest bidder in the said auction. It is also admitted fact that the father of the complainant had deposited the 1/4 amount. It is also an admitted fact that there was dispute between Urban Improvement Trust and the other parties. Stay order was issued by the Civil Court which was later dismissed. It was the duty of the opposite parties to give information of getting the amount deposited to the parties but they did not give information nor returned the deposited amount on cancellation of allotment. When this allotment was cancelled, the information of cancellation of allotment ought to have been given along with the principal amount with interest which was not returned. Under these circumstances, it was an immaterial ground and any kind of delay cannot be accepted.
There is no fault in order passed by the learned District Forum, therefore, appeal is liable to be dismissed and is dismissed.”
7. Aggrieved by this order petitioner filed S B Civil Writ Petition no. 4633/2017 before the High Court of Judicature, Jodhpur, Rajasthan which was withdrawn with permission to approach this Commission which was permitted.
8. The petitioner contends that the complainant is barred by limitation and relies upon judgments of the Hon’ble Supreme Court in (i) Anshul Aggarwal vs New Okhla Industries Development Authority (2011) 14 SCC 578 wherein it was held that delay in filing a complaint cannot be condoned unless a just and a sufficient cause is shown by a party seeking condonation; (ii) in Basawaraj & Anr. vs Special Land Acquisition Officer and Basawaraj and Ors., vs Special Land Acquisition Officer in Civil Appeal nos.6974 and 6975 of 2013 decided on 22.08.2013 – (2013) 14 SCC 81 wherein it was held that:
Sufficient cause is the cause for which defendant could not be blamed for his absence. The meaning of the word “sufficient” is “adequate” or “enough”, inasmuch as may be necessary to answer the purpose intended. Therefore, the word “sufficient” embraces no more than that which provides a platitude, which when the act done suffices to accomplish the purpose intended in the facts and circumstances existing in a case, duly examined from the view point of a reasonable standard of a cautious man. In this context, “sufficient cause” means that the party should not have acted in a negligent manner or there was a want of bona fide on its part in view of the facts and circumstances of a case or it cannot be alleged that the party has “not acted diligently” or “remained inactive”. However, the facts and circumstances of each case must afford sufficient ground to enable the Court concerned to exercise discretion for the reason that whenever the Court exercises discretion, it has to be exercised judiciously. The applicant must satisfy the Court that he was prevented by any “sufficient cause” from prosecuting his case, and unless a satisfactory explanation is furnished, the Court should not allow the application for condonation of delay. The court has to examine whether the mistake is bona fide or was merely a device to cover an ulterior purpose.
9. In the instant case it is argued that sufficient cause has not been shown to justify condonation of delay. The contention of petitioner is also that a purchaser in an auction cannot be treated as a ‘consumer’ in terms of the judgment of the Hon’ble Supreme Court in U T Chandigarh Administration & Anr. Vs. Amarjeet Singh & Ors. (2009) 4 SCC 660 wherein it was held that an auction purchaser cannot be termed as a consumer under the CP Act, 1986 for the following reasons:
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 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.
[ Emphasis added ]
10. The case of the respondent is that the delay in filing the complaint is because the service of the demand letter dated 09.03.1971 which was allegedly sent to the respondent to deposit the balance 3/4th amount is not proved. The complaint before the District Forum was filed after exhausting all other remedies and after approaching the concerned offices for allocation of the plot in question. It is contended that the petitioner was a service provider and respondent was a consumer and that the sale of the land related to a plot constructed by the petitioner specifically for residential purpose. It is also stated that no letter conveying the vacating of the stay order was sent in the name of late Ratan Lal during his lifetime or even after his death. The legal heirs of late Ratan Lal were unaware of the existence of the said property and came to know about it only during 1993 from old papers of the late Ratan Lal. The State Commission in its order dated 02.02.2017 has recorded that it was the duty of the petitioner to give information regarding depositing of money to the respondent. However, the alleged demand notice dated 09.09.1971 was never served on the respondent during his lifetime. This fact had been noted by the Compromise Committee on 03.07.2003. The, District Forum vide order dated 30.07.2007 had also allowed the complaint of the respondent holding that the service of demand notice dated 09.03.1971 was not clear. It is argued that since the respondent never got the possession of the land due to the petitioner’s fault, the amount deposited by the respondent cannot be forfeited.
11. The respondent relied upon judgment of the Hon’ble Supreme Court in Collector, Land Acquisition, Anantnag and Ors. vs Katiji Ors. 1987 (2) SCC 107 wherein it was held that “when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”. Reliance was also placed on the Hon’ble Supreme Court’s judgment in Esha Bhattacharjee vs Managing Committee Raghunathpur Nafar Academy, (2013) 12 SCC 649 wherein principles for condonation of delay were laid down including:
(i) There should be a liberal, pragmatic, justice – oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice;
(ii) The terms ‘sufficient cause’ should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact situation;
(iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis;
(iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of;
(v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact; and
(vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.
12. It is contended by respondent that the petitioner was a service provider and respondent was consumer as held by this Commission Kunj Bihari Lal (since deceased) vs Urban Improvement Co. Pvt., Ltd., RP No. 306/2013. Reliance was also placed on this Commission’s order in Sheo Prakash Gupta & Anr. vs Kanpur Development Authority in FA No. 374/2015 wherein the facts are stated to be similar to the present case and it was held that complainants were consumers qua the Kanpur Development Authority.
13. On the issue that the petitioner cannot forfeit the amount of the respondent, the respondent has relied upon the order of this Commission in Sheo Prakash Gupta & Anr. (supra) that since petitioner failed to discharge its service diligently, the petitioner has no right forfeit the amount.
14. According to the petitioner late Ratan Lal was not a ‘consumer’ as the property was purchased through auction. Therefore, the consumer fora do not have jurisdiction to entertain the complaint. The settled law as per Hon’ble Supreme Court in T. Chandigarh Administration & Anr. (supra) is that public auction with reference to existing sites does not qualify a purchaser to be a ‘consumer’ as below:
“14. 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 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.”
[ Emphasis added ]
15. The orders of the lower fora are concurrent on facts. Both the District Forum and the State Commission have reached concurrent findings based on the pleadings by both the sides. The petitioner has, however, raised the issue of jurisdictional error in that the late Ratan Lal as an auction purchaser was not a ‘consumer’ qua the petitioner in terms of the judgment of the Hon’ble Supreme Court in T. Chandigarh Administration and Anr. (supra). In view of the settled law in regard to an auction purchaser not being entitled to be treated as a ‘consumer’ under the Act, the lower fora have certainly acted without jurisdiction in entertaining and adjudicating in this matter in the Consumer Complaint and First Appeal respectively.
16. In view of the facts and circumstances of the case and for the aforesaid reasons, the revision petition is found to have merits and is liable to succeed. Accordingly, revision petition no.3053 of 2018 is allowed. The impugned order of the State Commission as well as District Forum is set aside. Parties shall bear their own costs. Pending IAs, if any, stand disposed of with this order.
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