Punjab Urban Planning & Development Authority v. Bhupinder Singh

ALTAMAS KABIR, J. 1. Civil Appeal Nos. 7726 to 7730 ... B arise out of a common order dated 181h September, 2001, passed by the National Consumer Disputes Redressal Com- mission in respect of Revision Petitions Nos. 1056, 1057, 1058, 1136 and 1055 of 2001. Special Leave Petition (C) No. 7280 of 2002 arises out of a similar order of the National Commis- c sion dated 71h November, 2001, passed in Revision Petition No. 17 43 of 2001. Since the five appeals arise out of a com- mon order of the National Commission and the issue involved .,- I in the special leave petitions is the same, all the six matters • l were taken up for hearing and final disposal together. Leave is :1 D granted in Special Leave Petition (C) No. 7280 of 2002. 2. As will appear from the materials on record, in 1989 the Punjab Urban Planning and Development Authority (hereinafter referred to as the "PUDA"), the appellant herein, invited applica- E tions from persons who wished to acquire Higher Income Group (Single Storey) category houses at Phase IX SAS Nagar. Inter- ested applicants were required to deposit a sum of Rs.4,000/- while making such application. In the advertisement inviting appli- cations, it was categorically mentioned that no interest would be payable on the earnest money. About 5416 applications were re- ,,. .. ceived by PUDA in response to the said advertisement and draw of lots for houses immediately available in Phase IX SAS Nagar was held on 101h November, 1989. According to PUDA, the infor- mation sheet, supplied along with the prescribed application forms, made it clear that allotment of houses would be made on the basis G of draw of lots and that the deposit of earnest money would not create any vested right of allotment to any of the applicants. Ac- ~~ cording to PUDA, earnest money was refunded to those unsuc- cessful applicants who desired that their earnest money be returned to them. However, out of the unsuccessfal applicants, 1965 appli- H cants did not seek refund of their earnest money. PUNJAB URBAN PLANNING & DEV. AUTHORITY 963 ., v. BHUPINDER SINGH [ALTAMAS KABIR, J.] 3. It transpires that in 1991 the Department of Housing A and Urban Development of the Government of Punjab was merged with the Punjab Housing Development Board. ln 1995, the Punjab Housing Development Board which had been con- stituted under the Punjab Housing Development Board Act, ,.. 1972, was abolished by virtue of the provisions of the Punjab B Regional and Town Planning and DevelopmentAct, 1995 (here- inafter referred to as "the 1995 Act"). The Punjab Urban and Development Authority was thereafter constituted with effect from 1st July, 1995, under the provisions of the 1995 Act and was given the responsibility for the effective and planned develop- c ment of housing schemes and for undertaking Urban Develop- ment and Housing Programmes for establishing new towns in the State of Punjab. It appears that on account of non- availabil- ity of suitable land with PUDA, no High Income Group Scheme could be formulated for construction of Higher Income Group D houses between 1989 and July, 1996. 4. In 1996 PUDA formulated a scheme for construction of 354 Higher Income Group Houses on land available in Sector 70 SAS Nagar. It also appears that under Section 23 of the 1995 Act, the authority is competent to appoint one or more E I committees for securing efficient discharge of the functions of the authority. Under Regulation 8 of the Punjab Urban Planning and Development Authority (Committees and Conduct of Busi- ness) Regulations, 1996, the Finance and Accounts Commit- ~·y tee was duly constituted to perform the function of determining F prices and policies for disposal of land, plots and houses, be- sides discharging other functions. The said committee at its meeting held on 241h July, 1996, considered the question of dis- posal of the proposed 354 partially finished duplex houses in Sector 70, SAS Nagar and took the following decision: G "Item No. 9.07. Disposal of 354 independent partially ~~ finished duplex houses in Sector 70, SAS Nagar. Approved with the modification that 154 houses be offered to old applicants and 200 to fresh applicants at present "t A rates .. It may be ensured that money deposited by old or new applicants be refunded to all unsuccessful applicants immediately after draw ·at lots." 5. Pursuant to the aforesaid decision, a public notice was published in the Tribune on 121h September, 1996, wherein it ... was announced that the applicants.who had applied in 1989 for Higher Income Group Scheme by deposit of Rs.4,000/- and had not received refund.of the same would be considered for,allot- ment by draw of lots for 154 such houses in Sector 70, SAS Nagar. Subsequently, on 20th September, 1996, it appears that c those applicants_ who had· participated in the draw of lots on 1 Oth November, 1989, and had not withdrawn their earnest money, were induded.in.the draw of lots for the 154 Higher In- come 9roup Houses in Sectdr 70 SAS N_agar. D 6. Thatall the applicants who were successful in the draw of lots conducted on 20.9.1996 were issued allotment letters and those who were unsuccessful were returned the earnest m.oney 9f Rs.4,000/-which had been deposited by them. Since the sa,id earnest money .was returned by PUDA without any in- terest calculated thereupon, some of the' u'nsuccessful candi- dates. filed complaints before the District Forum _complaining that despite having retained the earnest mc:mey of RsA,000/- since 1989, PUDA had refunded o.nly the said amount without a~y int¢re~t thereupon. The complainants in the several com- plaints GI.aimed c,ompensation from PUDA in respect of the ~4 F ear.nest money depbsited by them py way of interest at the rate o( 2:4% p_er annt,Jm apart from compensation for harassment, . ' - . I , I . ~ "' .. I - mental agony and inconvenience .. The applicants also prayed for co~ts of the proceedings .. ' G 7. The appellant .herein contested the several proceed- ings initiated by the unsuccessful cipplicants and took a plea that.no'interest was required to be paid qn the amount depos- , # • ' \ • • ,....~ ited by the complainants on account of the factthat it had been categorically mentibned·in the advertisement inviting applica- H tions that no interest would be payable on the earnest money. .,. PUNJAB URBAN PLANNING & DEV. AUTHORITY 965 'I v. BHUPINDER SINGH [ALTAMAS KABIR, J.] On the basis of the evidence before it the District Forum al- A lowed the complaints and awarded a cost of Rs.550/- in each case and also directed PUDA to pay interest on the amount deposited as earnest money at the rate of 18% per annum. for the period up to the date of payment of the total amount to the complainants, less a period of two years from the date of de- B posit. 8. Aggrieved by the aforesaid order of the District Forum, PUDA filed appeals before the Consumer Disputes Redressal Commission, Chandigarh. The submissions made before the District Forum that interest was not payable on the earnest c money was reiterated and it was also indicated that since the earnest money deposited by the respondents in 1989 had not been returned to them, as the respondents had not asked for refund of the same, they had been given a second opportunity to participate in the draw of, lots on the basis of their original D deposit, although, the deposits for participating in the subse- quent draw of lots held on 20.9.1996 was much higher. PUDA's case appears to be that on the strength of the earnest money deposited once the respondents had been given two opportu- nities to participate in the draw of lots and that it could not, there- E fore, be contended that the said sums deposited by way of ear- nest money had been retained by PUDA with an ulterior objec- tive in mind. :>., 9. Concurring with the view expressed by the District Fo- rum and relying upon the decision of the National Commission in F the case of S. P. Davaskar vs. Housing Commissioner Karnataka Housing Board, reported in 1977 CCJ 360, the Appellate Forum came to the conclusion that according to the law as explained by the National Commission in its above decision, PUDA was re- quired to pay interest on the amounts deposited which were kept G by the Board for a period of 2 years or more. The Consumer ·- Disputes Rederessal Commission, Chandigarh, accordingly dis- missed the appeals preferred by PUDA upon holding that the District Forum had rightly allowed the interest at a rate which was neither excessive nor unreasonable. H. ~ A 10. The said decision of the Consumer Disputes Redressal Commission, Chandigarh was challooged by PUDA before the National Consumer Disputes Redressal Commis- sion, New Delhi, by way of Revision. The same was, however, dismissed by the National Commission which agreed with the B decision of the District Forum directing PUDA to pay interest ..., on the deposits made in 1989 and left unreturned till 1996, at the rate of 18% per annum for the period commencing from two years afterthe date of deposit till the date of payment. 11. It is ag_ainst the said order of the National Commission c that the_ present appeals have been filed. 12. Right at the outset it was submitted on behalf of PUDA that the proceedings taken by the respondents before the Con- sumer Forum were fnvalid and ought not to have been enter- D tained by the District Forum, inasmuch as, no case of deficiency of service had been made out on behalf of the respondents to attract the provisions of the Consumer Protection Act, 1986. Appearing for the appellant, Ms. Rachna Joshi lssar submitted that it had been consistently held by this Court that the onus of E proving deficiency of service is upon the complainant seeking relief under the Consumer Protection Act. The respondent did not have any vested right of allotment unless they succeeded in the draw of lots. It was submitted that the respondents on their application had_ only a right to be considered for allotment if they were otherwise eligible and that they have been so consid- ered for allotment on 10 .11 .1989 and also on 20 .9 .1996 when -~· ...( the earnest money was fixed at Rs.62, 700/-, as against Rs.4,000/- deposited by them at the time of the first draw of lots held on 10.11.1989. Ms. lssar urged that neither had any malafide been alleged or proved against PUDA in the conduct of pro- G ceedings relating to the draw of lots on both the dates. Accord- ingly, in the absence of any case for deficiency of service or breach of contract made out by the applicants, the application ,_. before the District Forum was entirely misconceived and wholly without jurisdiction. : .. PUNJAB URBAN PLANNING & DEV. AUTHORITY 967 v. BHUPINDER SINGH [ALTAMAS KABIR, J.] 13. Ms. lssar also urged that when initially the draw of lots A was held on 10.11.1989, those unsuccessful applicants who desired refund of their earnest money were given such refund immediately. Out of the unsuccessful candidates 1965 appli- cants did not seek refund of their earnest money which was retained by PUDA to give such applicants an opportunity to par- 8 ticipate in the next draw of lots. Mr. lssar also reiterated that in the advertisement inviting applications it had been clearly indi- cated that no interest would be payable on the earnest money deposited and that having regard to the above the respondents should have asked for refund of the amount deposited by them c without waiting for the same to be refunded by PUDA. 14. Ms. lssar submitted that the respondents should not be allowed to approbate and reprobate in the same breath hav- ing participated in the second draw of lots bn the basis of the earnest money deposited by them earlier, and, on the other hand, D, claiming interest thereupon after being unsuccessful in the draw of lots. Ms. lssar submitted that this amounted to malice in law and the claim of the respondents, instead of being allowed, should have been rejected with appropriate costs. 15. At this stage it may be indicated that when the ap- E, peals were taken up for final hearing on 3.4.2008, no one ap- pea red on behalf of the respondents in any of the appeals, and, accordingly, fresh notices were issued to the respondents indi-...... eating that in the event they were not represented on the next date of hearing, the appeals would be heard and disposed of F , finally in the absence of the respondents. The Office Report dated 5.5.2008, indicates that notices had been issued to all the respondents on 9.4.2008 but neither the AD Cards nor the unserved covers have been received back. Since one month had expired when the appeals were again listed for hearing G and still no one was present on behalf of the respondents, the appeals were taken up for hearing in their absence. 16. From the materials placed before us by Ms.lssar, the admitted position is that the earnest money deposited by the H A respondents in 1989, when making applications for acquiring Higher Income Group (Single storey) Category Houses at Phase IX, SAS Nagar, had not been returned to the respondents, while in other cases the same was returned to the applicants. The explanation given by PUDA that suQh earnest money was re- B funded to those who had claimed such refund; but was not re­ funded to those who did not, is not very convincing. It cannot, however, be overlooked that the respondents did get the ben­ efit of such retention by being permitted to participate in the draw of lots held for ·the second time on 20.9.1996. Apart from c that, there is also no explanation as to why the respondents had not asked for refund of the earnest money and allowed the same to remain with PUDA. 17. Furthermore, the respondents did not object to the con­ tents of the public notice published in the "Tribune" on 121h Sep- D tember, 1996, categorically indicating that those applicants who had earlier applied for allotment of Higher Income Group Houses and had not withdrawn the deposit of Rs.4,000/- made by them would also be included in the draw of lots scheduled to be held on 20th September, 1996 for 154 such houses in Sector 70 SAS E Nagar. On the other hand, the respondents allowed themselves to be included in the draw and only when they proved to be un­ successful, then they moved the Consumer Forum contending that they were entitled to interest on the deposit which had been made in 1989 and had not been returned to them by PUDA. Of F course, there is also nothing on record to show that the respon­ dents had even asked for return of their individual deposits of Rs.4,000/~, with or without interest thereupon, fro,m PUDA be­ fore the same was returned to them after they were unsuccess­ ful in the second draw of lots. Despite, the stipulation in the G advertisements that no interest would be paid on the earnest money, the District Forum allowed the complaints made by the respondents and awarded cost in each case together with in­ terest at the rate of 18% per annum for the period from the date of deposit up to the date of payment of the total amount, less a H period of two years from the date of deposits. Since no one ,A I PUNJAB URBAN PLANNING & DEV. AUTHORITY 969 v. BHUPINDER SINGH [ALTAMAS KABIR, J.] had appeared on behalf of PUDA before the District Forum, A the matter was proceeded with ex-parte and merely upon re- cording that it was specified that PUDA had retained the amount of Rs.4,000/- from 101h March, 1989 till 191h January, 1997, with- out any reasonable cause, which amounted to deficiency in service on the part of PUDA, it granted interest to the complain- B ant at the rate of 18% in the manner indicated herein above. 18. In the appeal filed by PUDA the State Commission did not give much importance to the stipulation contained in the advertisement that no interest would be payable on the regis- tration fee, and without taking into account the fact that on the c basis of the said deposits the respondents had been included in the second draw of lots, affirmed the order passed by the District Forum mainly on the basis of a decision of the National Commission in the case of S.P. Davaskar (supra) the facts of which are not only distinguishable but completely different from D the facts of the present case. 19. Even the facts of the other decision of the National Commission in the case of George Thomas and ors. Vs. Ghaziabad Development Authority and Anr., [1999 (1) CPC E 183], relating to payment of interest on deposited amounts, is distinguishable on facts. If the facts, which are peculiar to this case, are taken into consideration, the retention of the earnest money by PUDA cannot be brought within the ambit of the two ~' aforesaid decisions. The retention of the amount in this particu- lar case was pursuant to a policy which allowed the depositors, F who had not withdrawn their deposit, to participate in a subse- quent draw of lots without having to pay anything more than what had been deposited by them, even though the amount of de- posit may have gone up several times. 20. In our view, the single most important aspect of this G 'llf!.-c case is that on the failure of the respondents to ask for refund of the deposited amount within a reasonable time, the same was not refunded to them by PUDA. Not having asked for such re- fund, the respondents cannot also take advantage of their lapse. A H the respondents had succeeded in the second draw of lots, this question, which has been raised on their behalf before the Consumer Forum might never have arisen. In our view, it will be inequitable to saddle the appellants only with the responsibility of non-refund of the earnest money between 101h March 1989 8 and 191h January, 1997. 21. We, therefore, allow the appeals in part and direct that the rate of interest payable by the appellant, as directed by the District Forum and upheld by the State Commission, at the rate of 18% per annum from the date of deposit till the date of actual C payment shall stand reduced to 10% for the period in question. The cost of litigation granted by the District Forum is also set aside. 22. There will be no order as to costs. N.J. Appeals partly allowed. • .L )-