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Haryana Urban Development Authority v. Pawan Kumar Gupta

National Consumer Disputes Redressal Commission
Jul 10, 2013
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Summary of Opinion — National Consumer Disputes Redressal Commission

Factual and Procedural Background

This revision petition (Revision Petition No. 857 of 2010) was filed under Section 21(b) of the Consumer Protection Act, 1986 against the State Commission's order dated 20 November 2009 in Appeal No. 609 of 2006 (Haryana). The petitioner is HUDA (through its Estate Officer, Gurgaon) and the respondent is Pawan Kumar Gupta.

Relevant factual chronology (as stated in the opinion):

  • Application for allotment: Application No. 014712 dated 20.08.1992 by the respondent for a 10 marla plot in Sector 9, Gurgaon.
  • Earnest money: Rs. 22,836 (10%) paid in cash on 20.08.1992.
  • Allotment: Plot No. 1184 (220 sq. meters) allotted vide memo no. E O (G)/ALT 9/961 dated 09.07.1993.
  • Payments at allotment: Rs. 34,924 (15% of tentative price) paid by bank draft dated 24.07.1993; this brought initial payment to 25% of tentative price, balance payable in six annual instalments.
  • Additional payments: Rs. 1,51,031 paid towards additional price as per notification dated 03.05.1999; full and final payment noted as received by HUDA in 1998 and escalated price received on 23.03.2002 (opinion states full and final payment was received and escalated price also paid).
  • Allegation of delay: The respondent alleged undue delay in offering possession (possession was to be offered after completion of development and not later than two years), claiming that possession was not given for over 12 years from allotment and that this caused harassment, increased construction costs and other losses.
  • Proceedings below: The District Consumer Forum found that physical possession was delivered during proceedings (record indicates possession delivered on 24.10.2005), awarded interest at 18% per annum on deposits from dates of deposit until delivery of possession, struck down certain extension-fee demands and ordered refunds with interest; the State Commission upheld the District Forum order in its order dated 20.11.2009. The present revision petition challenges that State Commission order.

Legal Issues Presented

  1. Whether the orders of the District Forum and the State Commission were vitiated by jurisdictional error or illegality in relation to delay in offering possession and the finding of deficiency in service by the petitioner (HUDA).
  2. Whether the demands made by the petitioner (including an extension fee of Rs. 14,564 per Memo No. 17260 dated 15.09.2005) were valid and recoverable given the timing of physical possession.
  3. Whether interest should be awarded to the allottee on deposits, and if so, at what rate (the District Forum awarded 18% per annum; the allotment terms specified 15% in case of default).

Arguments of the Parties

Petitioner (HUDA) — Arguments as recorded in the opinion

  • The forums below erred in facts and law and misconstrued documentary evidence and applicable provisions when passing their orders dated 20.11.2009.
  • The petitioner’s counsel was not present at the time of decision before the State Commission, which deprived the petitioner of the opportunity to be heard and to place true facts before the State Commission.
  • The respondent was bound by the terms and conditions of the allotment letter, rules, regulations and HUDA policies, and was liable to pay outstanding amounts demanded by HUDA.
  • Offer of possession was made after completion of development works on 29.06.2001; it was the respondent who failed to take possession, and thus the complaint was not maintainable and the District Forum exceeded jurisdiction.
  • The demand of Rs. 14,564 as extension fee (Memo No. 17260 dated 15.09.2005) was rightly raised in accordance with HUDA policy and allotment terms; the District Forum erred in striking down that demand.
  • The award of interest at 18% per annum was incorrect as the allotment terms did not require HUDA to pay such interest; possession had been offered on 29.06.2001 and respondent failed to take it.

Respondent (Complainant) — Arguments/Contentions as recorded in the opinion

  • The respondent asserted that full payments (including escalated price) were made and yet possession was unduly delayed; physical possession was not given for many years (alleged over 11–12 years), causing harassment and increased costs.
  • The respondent maintained that possession was in fact delivered only on 24.10.2005 during the pendency of proceedings, and that certain demands (notably the extension fee) were not payable for periods prior to physical delivery of possession.
  • The respondent contended that the demands made vide Memo No. 17260 included amounts (Rs. 8,246 as instalments and Rs. 88,335 towards enhancement) which might be recoverable under terms, but Rs. 14,565 as extension fee could not be demanded as possession was delivered on 24.10.2005; this extension-fee component was struck down by the District Forum and ordered refunded with interest.
  • The respondent sought interest on deposits from dates of deposit until delivery of possession to compensate for the delay and rise in construction costs.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Presiding Member examined the record of the proceedings before the District Forum and the State Commission and articulated the following analytical steps (as recorded in the opinion):

  1. Procedural posture: The State Commission appeal was old (relating to 2006) and the appellant (HUDA) repeatedly failed to appear on four consecutive hearing dates before the State Commission (11.06.2007, 29.08.2007, 17.01.2008 and 27.01.2009); that unexplained absence undermined the petitioner's complaint that it was deprived of opportunity to place facts before the State Commission.
  2. On the claim of offer of possession dated 29.06.2001: The petitioner’s counsel relied on that document, but the respondent denied receipt and the petitioner failed to produce evidence proving that the communication had been received by the respondent. The court noted that the clause in paragraph 7 of the allotment letter (possession to be offered on completion of development works) was open-ended with no explicit time limit, which the court described as "patently unfair".
  3. Timing and payments: It was accepted as undisputed that the allotment occurred on 09.07.1993 and that full and final payment (including escalated price) was paid by 23.03.2002. However, physical possession was given only on 24.10.2005 — more than 11 years after allotment — which the court considered demonstrative of deficiency in service by HUDA.
  4. Findings of the District Forum: The District Forum had found that possession was delivered during proceedings and awarded interest at 18% per annum on deposits from the dates of deposit until delivery of possession to compensate for the delay and rise in construction costs; it also struck down the extension-fee demand for the period before physical delivery of possession and ordered a refund with interest for that component.
  5. Review of alleged errors: The court found no jurisdictional error, illegality or infirmity in the State Commission's order that would warrant interference; the State Commission had correctly concluded there was a deficiency in service and did not err in upholding the District Forum’s core conclusions.
  6. Adjustment to interest rate: The court noted that the allotment terms provided that interest payable by an allottee in case of default is 15%. In the interest of equity and fairness, the court partially modified the District Forum’s award by reducing the rate of interest awarded to the complainant from 18% to 15% per annum. The court expressly left the rest of the District Forum's order intact.
  7. Disposition: On the basis above, the court concluded there was no basis to interfere further and disposed of the revision petition accordingly.

Holding and Implications

Holding: The revision petition was DISPOSED OF. The State Commission's order was not disturbed except for a modification in the rate of interest.

Specific operative consequences (as recorded in the opinion):

  • The District Forum’s order awarding interest to the complainant on deposits was partially modified: interest rate reduced from 18% to 15% per annum (15% being the rate reflected in the allotment terms for default).
  • All other aspects of the District Forum’s order — including findings of deficiency in service due to delayed physical delivery of possession, the striking down of the extension-fee demand for the relevant period, and orders for refunds with interest where appropriate — were left intact and continue to operate.

The opinion does not claim to set any binding new precedent beyond the facts of this case; it affirms the corrective approach taken by the lower forum(s) for delay in delivery of possession and adjusts the interest rate consistent with the allotment terms.

Bench: Hon'ble Mrs. Rekha Gupta, Presiding Member. Date of order: 10 July 2013.

Show all summary ...

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

REVISION PETITION NO. 857 OF 2010

(Against the Order dated 20/11/2009 in Appeal No. 609/2006 of the State Commission Haryana)

1. HUDA

Through its Estate Officer Gurgaon

Haryana ...........Petitioner(s) Versus

1. PAWAN KUMAR GUPTA

43, Sarojini Park, Shastri Nagar New Delhi - 110031

Delhi ...........Respondent(s)

BEFORE:

HON'BLE MRS. REKHA GUPTA, PRESIDING MEMBER For the Petitioner : MR. R.S. BADHRAN For the Respondent : IN PERSON Dated : 10 Jul 2013

ORDER

REKHA GUPTA Revision petition no. 857 of 2010 has been filed under section 21 (b) of the Consumer Protection Act, 1986 against the order dated 20th November 2009 passed by the Haryana State Consumer Disputes Redressal Commission, Panchkula in First Appeal no. 609 of 2006. The brief facts of the case as per the respondent/complainant are as follows: The respondent had applied for allotment of 10 Marla Plot in Sector 9, Gurgaon to the Petitioner/ Opposite Party vide application no. 014712 dated 20.08.1992 and has deposited earnest money of 10% amounting to Rs.22,836/- in cash on 20.08.1992. Respondent was allotted a plot bearing no. 1184 ad-measuring 10 marlas, i.e., 220 sq mtrs, in Sector 9, Gurgaon vide memo no. E O (G)/ ALT 9/ 961 dated 09.07.1993 issued by the petitioner and a sum of Rs.34,924/-, i.e., 15% of the total tentative price was deposited with the petitioner vide Bank draft no. 283813 dated 24.07.1993 drawn on SBI, Laxmi Nagar, Delhi and thus 25% of the total price was paid at the time of allotment and the balance 75% sale price was payable in 6 yearly instalments. The respondent has also deposited Rs.1,51,031/- towards the cost of additional price i.e., 574/- sq. yds, as desired in notification no. 7904 dated 03.05.1999. Thus full and final payment has been received by HUDA in 1998 and escalated price also on 23.03.2002. The respondent has paid Rs.3,80,031/- as per the above list enclosed and the petitioner had received full and final payment but they unduly delayed the possession of plot for no fault of the respondent causing undue harassment, mental agony and irreparable loss. The above said plot was allotted to the respondent with a provision to offer possession of the same after completion of its full development in the area at the earnest and not later than two years. But now more than 12 years have passed since the date of allotment of the said plot and the petitioner has not bothered to offer. The possession of the said plot to the respondent till this date after completion of full development work in the area, inspite of repeated requests and

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personal visits to the office of the petitioner. Time and again, the respondent has visited the site. During long spell of 12 years, the petitioner neither developed his site well nor supply of sewage system, water supply and other amenities. Facilities like community centre, school, health centre required for the residential colony as declared by the petitioner, has yet to be provided. Furthermore as the possession was not given even after 12 years it has another impact, i.e., the cost of construction, cost of steel, cement, building material and labour charges etc., has increased approximately by 300%. Thereby what could have been done at a cheaper rate, will now, be done with more. The petitioner/ opposite party in their reply have stated that paragraph no. 4 of the complaint is wrong, baseless and hence denied. The area of this plot is fully developed and only thereafter physical possession was offered to the allottee vide this office memo no. 2749 dated 29.06.2001. As per the terms and conditions of the allotment the respondent/ allottee was given an offer of possession, but the allottee failed to even start the construction work and hence he is bound to pay the extension fee as per HUDA policy. Paragraph no. 7 of the complaint was also denied by stating that the area is fully developed and physical possession had already been offered to the allottee on 29.06.2001. The allottee failed to start the constructions and complete the building within two years from the date of offer of possession. The District Consumer Disputes Redressal Forum, Gurgaon (in short, he District Forum) came to the following conclusions after going through the file and hearing the parties:

ossession has been admitted to have been delivered during the proceedings. As per application dated 16.12.2005 conveyance deed is not being executed. It is ordered that the same be executed on furnishing papers by the complainant, if any, besides the complainant is awarded interest @ 18% per annum on deposits from the dates of deposits till the delivery of possession of his plot on the spot by demarcation and this interest is being awarded keeping in view the rise in construction cost so as to compensate him as he has been waiting for the plot since, 1993. During the arguments counsel for the complainant contended that another illegal demands have been raised vide memo no. 17260 dated 15.09.2005. We have perused the said letter Rs.8,246/- have been demanded as instalments due to on 15.10.2005 and Rs.88,335/- towards enhancement which could be recovered as per terms of the allotment. However, Rs.14,565/- demanded as extension fee could not be demanded as physical possession was delivered only on 24.10.2005. This last demand is struck down and this amount is ordered to be refunded to the complainant with interest as per HUDA policy from the date of deposit till the date of refund. As regards the plea that the complainant had already paid amount of instalment and enhancement in 10/99 and March 02 respectively, he has not mentioned any receipt number or date. He can agitate the matter again with the HUDA and in case the complainant paid amount of instalment and enhancement double, respondent is liable to refund the said amount to the complainant along with interest from the date of deposit till the date of refund as per HUDA policy. There will be no other orders as to costs. Compliance of the above order be made within one month from the receipt of the copy of this order Aggrieved by the order of the District Forum, the petitioner/ opposite party filed an appeal before the State Commission. The State Commission in their order has recorded that one has put in appearance on behalf of the appellant. Perusal of the file shows that this appeal is old one and relates to the year 2006. No one has taken care to appear on behalf of the appellant before this Commission from the last four consecutive hearings, i.e., 11.06.2007, 29.08.2007, 17.01.2008 and 27.01.2009. Even today none has appeared on behalf of the appellant. Since this appeal is old, therefore, we do not find any justification to adjourn the case time and again. Hence we proceed to decide this appeal after going through the case file The State Commission thereafter came to the following conclusion: e have gone through the impugned order and taken into

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consideration the facts and circumstances of the case and are of the view that it is a case where the plot no. 1184, Sector 9, Gurgaon was allotted to the complainant on 09.07.1993 whereas the physical possession of the same was handed over to the complainant on 24.10.2005 during the pendency of the proceedings before the District Forum, i.e., after a period of more than 11 years, which itself shows deficiency in service on the part of the opposite party. Therefore, we do not find any ambiguity or illegality in the impugned order passed by the District Forum. No case for interference in the impugned order is made out. No merit. Dismissed Hence, this present revision petition. The main grounds for the revision petition are as follows: - Forums below erred in facts and law, and have misread, misconstrued and misinterpreted the documentary evidence available on record and also the mandatory provisions of law applicable on that fact while passing the orders dated 20.11.2009. In fact the counsel for the petitioner was not present at the time of deciding the matter which devoid the petitioner herein being heard and explain the position of the matter before the State Commission. The petitioner thus lost the opportunity to bring the true facts before the Commission. - The Forums below failed to appreciate that the respondent herein is bound by the terms and condition of the allotment letter as well as provisions of Act, Rules and Regulation, policies instructions framed and issued in this regard from time to time. The respondent herein is bound by the aforementioned rules, instructions and policies of the petitioner herein and to pay the outstanding amount as demanded by the petitioner herein. - The Forums below have not taken into consideration that the offer of possession of the plot was made after completion of all the developments works on 29.06.2001. However, it was the respondent herein who instead of taking the possession filed the complaint with ulterior motives. The complaint was thus not maintainable. The District Forum has travelled beyond its jurisdiction in entertaining the complaint under the Act, which ought to have been dismissed. - The Forums below failed to appreciate that vide Memo no. 17260 dated 15.09.2005 demand of Rs.14,564/- as extension fees was rightly raised as the respondent herein has failed to construct the building as per the terms and conditions of the allotment and as per HUDA Policy. The Forums below erred in striking down the said demand even though the same was demanded as per rule and regulations of HUDA policy and as per the terms and conditions of the allotment letter. - The Forums below erred in awarding interest @ 18% per annum on deposits from the date of deposits till the delivery of possession of plot on the spot by demarcation. As already submitted the possession of the plot was offered on 29.06.2001 and it was the respondent who failed to take the possession of the plot, as such there is no deficiency in the service. Moreover the interest so awarded is too high. I have heard the counsel for the petitioner and respondent in person and have gone through the record. Nowhere in the revision petition has it been mentioned as to why no one had put in appearance on behalf of the petitioner/ appellant on the last four consecutive dates in the State Commission on 11.06.2007, 29.08.2007, 17.01.2008 and 27.01.2009. Thereafter the petitioner cannot complain that they were not given opportunity to bring the true facts before the State Commission. The counsel for the petitioner drew my attention to the offer of possession dated 29.06.2001 and stated that it is the fault of the respondent that he did not take immediate possession. However, the respondent denied having received this communication. Counsel for the petitioner could not provide any evidence that the said communication had been received by the respondent. Counsel for the petitioner then stated that the petitioner was objecting to pay 18% interest because as per the terms and condition of the allotment letter it was not due. He drew my attention to paragraph 7 of the allotment which states that ossession of the site will be offered to you on completion of the development works in the area, where situated It is however, patently unfair that this clause is open ended with absolutely no time limit. The

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petitioner had taken full payment from the respondent by March 2002 with the first payment being taken in August 1992. It is an undisputed fact that plot bearing no. 1184, Sector -9, Gurgaon was allotted by the petitioner to the respondent vide memo no. E O (G) /ALT 9/ 961 dated 09.07.1993 at a tentative base price of Rs.22,836/-. Full and final payment including the escalated price was paid by 23.03.2002. However, the physical possession of the plot was given only on 24.10.2005. The respondent has now received both physical possession of the plot as also the conveyance deed. The petitioner is objecting to pay interest @ 18% per annum for the period upto 29.06.2001. The respondent has stated however, that since interest has not been paid till date, he should get the same even for the period beyond 2005. In view of the above, we find that there is no jurisdictional error, illegality or infirmity in the order passed by the State Commission warranting our interference. However, as per the terms and conditions of the allotment letter, the interest payable by allottee in case of default is 15%. In all fairness and in the interest of equity and justice, the order of the District Forum is partially modified by reducing the rate of interest from 18% to 15% per annum. Rest of the order stands as it is. In view of the foregoing, the revision petition stands disposed of.

......................

REKHA GUPTA

PRESIDING MEMBER

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