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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The petitioner (also the complainant) applied for allotment of a 14 marla plot in Sector-15, Sonepat, after the respondent (Housing Board) invited applications. The petitioner deposited Rs. 63,400 as earnest money on 22.01.2001. The draw of lots was held on 14.03.2001 and the petitioner was declared successful and notified by letter dated 27.03.2001, though no plot number was then allotted. A further communication dated 17.09.2004 informed the petitioner of allotment of plot No. 2740-C, i.e., roughly three years later.

The petitioner alleged that the respondent arbitrarily enhanced the price of plots (from Rs. 1,700 per sq. yard to Rs. 1,963 per sq. yard), and that he was burdened with enhanced price and interest obligations. He deposited further sums (two demand drafts dated 16.10.2004 totaling Rs. 1,95,285) and was charged interest at 15.5% p.a. on the remaining 75% of the cost, payable in six equal installments. He also complained that the allotted plot was low-lying, waterlogged (about 5 ft.), and that roads and services were broken; he alleged physical possession had not been delivered in a fit condition.

The District Consumer Disputes Redressal Forum, Sonepat, by order dated 25.01.2006, accepted the complaint and directed (inter alia) that the respondent not charge penal interest at 15.5% p.a., not recover the enhanced price, deliver actual physical possession and level the plot, provide basic amenities, and pay interest at 11% p.a. on the earnest money from 22.01.2001 to 17.09.2004 and compensation of Rs. 2,000.

The respondent appealed to the State Consumer Disputes Redressal Commission (First Appeal No. 694 of 2006), which allowed the appeal and dismissed the complaint by an impugned order dated 20.06.2007. The present revision petition challenges that impugned order. The court heard the petitioner and counsel for the respondent and considered the written record.

Legal Issues Presented

  1. Whether the allotment and subsequent documents (allotment letter and Hire-Purchase Tenancy Agreement) created a hire-purchase/tenancy relationship such that the complainant remained a tenant/hirer until full payment and execution of conveyance, and therefore whether the consumer complaint was maintainable.
  2. Whether the advertised price being "tentative" and the terms of the allotment/tenancy agreement justified enhancement of the plot price and the imposition of interest/penalty for delayed payments.
  3. Whether the petitioner was entitled to (a) relief from penal interest at the rate charged, (b) relief from enhanced price, (c) interest on earnest money, (d) delivery of physical possession and leveling of the plot and provision of basic amenities, and (e) damages for deficiency of service and mental agony.
  4. Whether possession delivered (possession certificate dated 27.10.2004) was effective to entitle the petitioner to claim consumer protection given the terms of the hire-purchase tenancy agreement and the timing of the complaint (filed 25.05.2005).

Arguments of the Parties

Petitioner's Arguments

  • The allotment was on a freehold basis, not on hire-purchase; as an allottee he should not be treated as a hirer/tenant.
  • The allotment letter and the brochure indicated freehold allotment and did not mention a hire-purchase agreement.
  • Physical possession could not be handed over without sanction of the Zonal Plan.
  • The plot was low-lying and unfit for construction; therefore the petitioner should not be charged interest on installments and should not bear the burden of enhanced price.

Respondent's Arguments

  • The advertised cost per sq. yard was tentative (as stated in the brochure) and could be finalized later.
  • After allotment, the petitioner signed the Hire-Purchase Tenancy Agreement; possession was given to him and he was therefore bound by its terms.
  • The terms of the Hire-Purchase Tenancy Agreement and brochure entitled the respondent to recover the balance price and charge interest for delayed payments; the charge of 15.5% p.a. was justified under the brochure/terms.
  • The respondent relied on clauses in the allotment letter and Hire-Purchase Tenancy Agreement (including provisions that the property belongs to the Board until full payment and limitations on transfer) to show the complainant held the property as a hirer/tenant for the hire-purchase period.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court reviewed the documentary record (allotment letter dated 17.09.2004, Hire-Purchase Tenancy Agreement executed on 27.10.2004, and the Possession Certificate dated 27.10.2004) and focused on the contractual terms incorporated in those documents. Key factual and contractual findings by the State Commission, approved by the court, included:

  • The allotment letter and the Hire-Purchase Tenancy Agreement described the price as "tentative" and specified a payment structure: an initial payment (15% preferential/corner plot amount) and the balance (75%) payable in six yearly equated installments with interest. Clause-7 set due dates and a penalty provision for late payment; Clause-8 stated the property shall continue to belong to the Board until full payment together with interest and other amounts was made.
  • The Hire-Purchase Tenancy Agreement (executed 27.10.2004) expressly fixed a hire-purchase period of six years and stated that the hirer would hold the property as tenant for that period; a provision (Clause-3, quoted in the record) stipulated that transfer (conveyance deed) would follow only after all dues were paid, after which the hirer would cease to be a tenant and become the owner.
  • Given these terms, the complainant was "duty bound" to pay installments as specified and would incur liability for interest in case of default. The tentative price could be finalized as per the agreement (the State Commission referred to term No. 2(w) and related clauses), so enhancement claims were not inconsistent with the contract terms.
  • The State Commission found that the complainant had executed the Hire-Purchase Tenancy Agreement, had taken possession (possession certificate produced) without preconditions, and therefore could not later claim the house was uninhabitable. The Commission treated the complainant as a tenant/hirer at the time the complaint was filed (25.05.2005), because the conveyance deed had not been executed and the installments had not been fully paid.
  • On the basis that the complainant was a tenant (and not the owner/allottee for all purposes) within the meaning of the hire-purchase contractual arrangement, the District Forum's jurisdiction to entertain a consumer complaint was held to be lacking or the complaint was otherwise not maintainable in the terms noted by the State Commission.
  • The present court considered and agreed with the State Commission's detailed analysis of the relevant clauses and with its conclusion that the complainant was a hirer/tenant under the Hire-Purchase Tenancy Agreement and that the complaint was not maintainable for the reasons stated.

Holding and Implications

Holding: The revision petition is dismissed and the impugned order of the State Commission (which allowed the appeal and dismissed the complaint) is upheld. The court expressly stated it found no ambiguity, infirmity or illegality in the impugned order.

Direct consequences and implications:

  • The District Forum order dated 25.01.2006 (which had allowed the complaint and granted reliefs such as disallowance of penal interest and compensation) was set aside by the State Commission, and that result is sustained by the present court.
  • The petitioner is treated as a hirer/tenant under the Hire-Purchase Tenancy Agreement until full payment and conveyance; therefore the contractual terms (including tentative pricing, installment obligations, and interest/penalty provisions) govern the parties' rights and obligations as analyzed by the State Commission and affirmed by this court.
  • No new legal precedent is created by this order beyond the application of the contractual provisions and the established findings in the record; the court noted that it was in full agreement with the State Commission's reasoning and dismissed the revision petition for lack of merit. The order records "No order as to cost."

Decision rendered by: V.B. Gupta, Presiding Member; Prem Narain, Member. Final order: revision petition dismissed.

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    Harpal Arya v. Housing Board Haryana Estate

    In this revision petition filed by Petitioner/Complainant, there is challenge to impugned order dated 20.06.2007 passed by State Consumer Disputes Redressal Commission, Haryana, Panchkula (for short, State Commission). Brief fact are, that Respondent/Opposite Party invited applications for allotment of plots in2. Sector-15, Sonepat. Accordingly, Petitioner applied for a plot under category of 14 Marlas @ 1,700/- per Sq. yard and deposited Rs.63,400/- as earnest money being 10% of the total cost of the plot on 22.1.2001 with respondent. The draw of lots was held on 14.3.2001. Petitioner was declared successful and was allotted plot vide letter dated 27.3.2001 but no plot number was allotted. Thereafter, allotment of plot No. 2740-C was communicated to the petitioner as per letter dated 17.09.2004, so to say after expiry of 3 years from the date of allotment. The grievance of petitioner he being an Advocate was in need of his own house but due to delay on the part of the respondent he had taken rental accommodation in Sector-14, Sonepat. During this period, cost of plot increased @ Rs. 263/- per sq. yard over the original price @ Rs.1,700/- per sq. yard when applications for allotment of plots were invited. Thus, total price of plot has been shown as Rs.7,39,100/-. It is alleged, that respondent enhanced the value of the plots arbitrarily by putting extra burden on petitioner as well as other allottees, which was not justified. Petitioner deposited Rs.1,95,285/ vide D.D. No. 072127 dated 16.10.2004 and D.D. No. 006597 dated 16.10.2004 in favour of respondent and he had also to pay interest @ 15.5% per annum on the remaining 75% of the cost of the plot which was to be paid within six months in equal installments. It was further stated, that allotted plot is 10-12 ft. deep from the road side, whereas abutting plots of HUDA were at even level. At the time paper possession of the plot was given to him on 27.10.2004 the site of the plot had been filed with 5 ft. deep water and at the time of filing the complaint the situation was the same. The roads, sewerage and water supply pipes were totally broken and for that reason plot in question was not worth fit for construction. It is also stated, that possession of plot had not been delivered to him. Accordingly, it was prayed that directions be given to respondent not to charge the penal interest @ 15% P.A. on the remaining 75% cost of the plot; not to recover the enhanced price of the plot @ Rs.1,963/- per sq. yard; to pay interest @ 11% on the earnest money deposited by the petitioner; to pay Rs.3,00,000/- as damages on account of deficiency of service, mental agony and pain and interest @ 18% per annum. Respondent in its written statement has stated, that at the time when petitioner had applied3. for allotment of 14 Marlas plot, he had deposited Rs.63,400/- as registration fee. It is stated, that advertised cost of the plot per sq. yard was tentative as mentioned in the brochure and after the draw of lots was held on 14.3.2001, petitioner was declared successful and was informed as per letter dated 17.3.2001 in this regard. The petitioner had deposited Rs.1,95,285/- towards the price of the plot and possession of the plot was handed over to him. It is further averred that, cost of the plot being tentative could be finalized after 7 years from the date of allotment as per terms and conditions (w) of the HIRE PURCHASE TENANCY AGREEMEN. The claim of interest @ 15.5.% per annum was justified as mentioned in the brochure itself. It is further stated, that as per condition No. 6(iv) it was clearly mentioned that respondent would not be responsible for levelling uneven sites. Accordingly, it was prayed that complaint merit dismissal. District Consumer Disputes Redressal Forum, Sonepat (for short, District Forum) vide4. order dated 25.01.2006 accepted the complaint and passed following order; this Forum directs the respondents not to charge penal interest at the rate of 15.5% per annum on the remaining cost of the plot which are to be paid in 6 equal installments and further not to charge the enhancement price and not to enhance the original price of the plot which was enhanced from Rs.1,700/- per sq. yards to Rs.1,963/-. The respondents are also directed to deliver the actual physical possession of the plot to the complainant and to level the plot in question and also directed to provide all the basic amenities like water supply, sewerage , electricity etc. The respondents are durther directed to pay interst at the rate of 11% per annum on the earnest money paid by the complainant at the time of submission of the application by the complainant till the allotment of plot in favour of the complainant was made. To make it more clear, the respondents are directed to pay interest at the rate of 11% per annum on the amount of Rs.63,400/- w.e.f. 22.01.2001 the date of submission of the application, till 17.09.2004 the date of on which the allotment of plot no. 2740-C was made in favour of the complainant. Since the complainant has been able to prove the deficiency in service on the part of the respondents, the respondents are also directed to compensate the complainant to the tune of Rs. two thousand only for rendering deficiency service as well as for causing mental agony and harassment . Being aggrieved, petitioner filed (First Appeal No. 694 of 2006) before State Commission,5. which allowed the same and dismissed the complaint, vide impugned order. Hence, this petition.6. We have heard the petitioner who himself has argued as well as counsel for respondent and7. gone through the written arguments as well as the record. It is stated by petitioner, that allotment of plot was on freehold basis and not on hire8. purchase basis. This basic fact has been totally ignored and not considered by the State Commission. Therefore, he is an allottee and not a Hirer. The allotment letter dated 17.09.2004, which contains the entire terms and conditions of the allotment and according to those conditions, he is an allottee. It is further stated by petitioner, that brochure issued by respondent, also mentions the9. allotment of plots on freeholds basis and no hire purchase agreement was mentioned therein. It is further argued by petitioner, that without sanction of Zonal Plan, actual physical10. possession of plot could not be handed over. Lastly, plot is in a very low lying area, so he should not be charged interest on the installments. On the other hand it is contended by learned counsel for respondent, that advertised cost of11. plot per square yard was tentative. After allotment, petitioner had signed the Hire Purchase Tenancy Agreement and physical possession of plot was given to him. Thereafter, since cost of the plot was tentative petitioner is liable to pay the balance amount along with interest. Thus, impugned order passed by State Commission is perfectly valid. State Commission in its order observed;12. Even in the allotment letter bearing memo No. 3706 dated 17.09.2004 the price of the plot has been mentioned to be Rs.8,13,010/- being tentative. The complainant was required to pay 15% of the sale price being Rs.1,21,375/- along with the amount of Rs.73,910 total Rs. 1,95,285/-for preferential/corner plot within

    30 days from the date of issue of the letter. The balance remaining 75% of the price was to be paid in 6 yearly equated instalments with interest, @ Rs.1,48,635/- and the first yearly instalment was to be paid after one year when the allotment of the plot was offered to the complainant. It is also stipulated in Clause-7 of the allotment letter that each instalment shall be payable by the 10 of the monthth following the month in which it falls due and in case the instalment is not paid by the stipulated date, penalty not exceeding 25% of the amount due shall be imposed. The building was to be completed within two years from the date of possession of the plot in accordance with the design supplied by the Housing Board. At the same time Clause-8 of the allotment letter clearly specified the property shall continue to belong to the Board until the entire consideration money together with interest and other amount, if any, due to the Board on account of sale of the plot is paid. The allottee shall have no right to transfer by way of sale gift, mortgage or otherwise the plot/building or any right or title or interest therein till the full price is paid to the Board except with the prior permission of the competent authority. Hire Purchase Tenancy Agreement has also been executed and signed by the complainant on 27.10.2004 coupled with the Tenancy Stipulations, which is Schedule-II of the above stated agreement. This Hire Purchase Tenancy Agreement has been executed in terms of Regulation 11(4) of the Regulations of the Appellant-Board. In this Tenancy Agreement it has been clearly mentioned that the total tentative price of the tenement had been worked out as Rs.8,13,010/-. It also incorporates the other amount which has also been paid by the complainant. The other conditions which have been notices in the allotment letter form part of this Tenancy Agreement. It has been specifically stated in Clause-3 of the agreement as under:-

    (3) The owner hereby agrees after the expiry of the hire purchase period to transfer the said property to the, hirer by executing conveyance deed with him in the prescribed form provided that he has paid all the dues of the owner and of the public bodies, if any prior to such execution. The hirer thereafter shall cease to be a tenant and become the owner of property subject to the provision of the said Conveyance Deed.
    From the above stated terms incorporated in the document produced on the record it is clearly spelled out that the complainant was duty bound to pay the installment amount in the manner detailed therein. Therefore, in case of default of the payment of the fixed instalment amount, the complainant had to incur the liability of interest. It is not the case of the complainant that he has paid the instalment of the above stated allotted plot then the period specified to the opposite parties. The grievance made from the side of the complainant that allotment of the plot as per letter dated 27.03.2001 was made to him after a period of 3 years of the draw of lots held on 14.03.2001 and he was declared successful and was so intimated vide letter dated 27.03.2001 and as such is inconsequential because Clause-5 of the brochure only provides that the possession of the plots would be handed over after completion of development works on AS IS WHERE IS BASIS. Therefore, the complainant has clearly agreed to the above stated stipulation mentioned in the brochure at the time when he had applied for the allotment of the plot. The other prayer that he is not liable to pay interest in terms of the above stated document, as such, cannot be accepted. He has to pay interest for the delayed payment of the instalments including the amount. Further the cost of the plot is tentative and has to be finalized within a period of 7 days of the allotment as per terms and conditions No. 2(w) of the Hire Purchase Tenancy Agreement, and for that reason escalated cost, as such, cannot be claimed as detailed therein. Thus, there is no force in the stand taken from the side of the complainant. Even otherwise, the complaint is liable to be rejected on the legal ground that the complaint is not maintainable in terms of Annexure A-2 noted above. From the terms of the Hire-Purchase Tenancy Agreement it is clearly spelled out that the hirer shall holds the property as a tenant for the Hire-Purchase period which is fixed for the Hire Purchase Agreement. As the complainant has not paid total instalments amount as per Hire Purchase Agreement in terms of the letter and no conveyance-deed has been executed in his favour. Therefore, on the date when the complaint was filed, he was a tenant and as such he could not invoke the jurisdiction of the District Forum by filing the present complaint alleging deficiency of service of service to the opposite parties . It is an admitted case of both parties, that petitioner was allotted the plot in question vide13. allotment letter dated 17.09.2004. As per this letter, plot has been allotted to the petitioner on free hold basis as per terms and conditions mentioned in the allotment letter which are subject to the provisions of Haryana Housing Board Act, 1971. Thereafter, Hire Purchase Tenancy Agreement was executed between the parties on 27.10.2004. The relevant provisions of this Agreement read as under; HIRE-PURCHASE TENANCY AGREEMENT THIS INDETURE MADE THIS day of Two 27 10 Thousand BETWEEN THE HOUSING BAORAD, HARYANA, 2004 constituted under the Haryana Housing Board act 1971 (act no.20 of 1971) (hereinafter called the owner and includes its successors and assigns) of the one part and Shri S/o Sh. (hereinafter called the hirerHarpal Arya Tek Chand which expression shall, unless inconsistent with the context or meaning, include, as representatives and permitted assigns) of the other part. WHEREAS, in pursuance of the Housing Board Haryana, (Allotment, Management and Sale of Tenements Regulations 1972 (hereinafter called the Regulations) the hirer has separately applied to the owner for allotment of a house under the Hire-Purchase scheme and the owner has agreed to allot a house to the hirer upon the terms and conditions hereinafter set forth. AND WHEREAS the total tentative cost of the tenement works out to Rs. 81,310/- ) AND WHEREAS the hirer has already paid as Rs.63,400/-(Rs. only) hire-purchase deposit. AND WHEREAS the hirer has paid Rs. Rs. one19,529/- ( only) months rent by way of monthly installment and which is hereby acknowledged to be the first installment. NOW THESE PRESENTS WITNESS that the owner hereby covenant and agree with the hirer and the hirer both hereby covenant and agree with the owner in manner following that is to say:- The hirer shall be put in possession of the property in the form of house bearing No. 2740-C situated in Section 15 Estate of the Housing Board Haryana at Sonepat and more particularly described in schedule I hereunder written and with boundaries thereof for greater clearness delineated on the plan annexed hereto as Schedule II and thereon coloured and shown in red only after he has duly executed this agreement. The hirer shall hold the said property as a tenant for the Hire-Purchase period which is fixed terms of six years commencing from the first day of the month of Oct. of the year two thousand and four and ending on the last day of the month of Sept. of year 2010 subject to the following conditions: a. The hirer shall pay without waiting for any demand from the owner the monthly rent(installment) of Rs.1,486.35/-(Rupees.............only) on or before the 10 day of eachth month at the office of the owner, the first of such payment has already been made by the hirer mentioned herein above and the same is considered to be taken as monthly rent (installments ) of the month of ................. and the next such payment is due and payable on or before the 10 day of month of Sept. of the year 2005 and so on subsequently for everyth calendar month till the expiry of the hire-purchase period . Thereafter, petitioner was handed over possession of H.No. 2740-C, in Sector 15, Sonepat.14. The copy of Possession Certificate is reproduced as under; POSSESSION CERTIFICATE It is certified that the possession of House No. 2740- C in Sector at Sonepat15 has been handed over to Sh. /Smt. Son/Daughter/wife of Sh. Harpal Arya Tek on dated whose specimen signatures is given blow:-Chand 27.10.2004 Sd/- 27.10.2004 Specimen sign. of allotee. Estate Manager, Housing Board Haryana, Sonepat . Thus, from the aforesaid documents, it is manifestly clear that petitioner had executed the15. Hire Purchase Tenancy Agreement with the respondent and in pursuance thereof, he had also taken possession of house on 27.10.2004. Further, as per possession certificate it is clear, that petitioner had taken the possession, without any pre conditions. Now after getting the possession, it does not lie in the mouth of petitioner to state, that house is not in a habitable condition. Once petitioner, had taken the possession with open eyes and without any pre-conditions, he cease to be a consumer. The consumer complaint was filed on 25.05.2005, that is, after about seven months of taking over the possession of the house. Therefore, on the face of it petitioner was not a Consumer at the time of filing of the complaint, since there was no privity of contract between the parties. Therefore, complaint is liable to be dismissed on this ground alone. . Lastly, the State Commission as per its impugned order has dealt in detail with all the16. relevant Clauses of the Hire-Purchase Tenancy Agreement. We are in full agreement with the reasonings given by the State Commission. Hence, we do not find any ambiguity, infirmity or illegality in the impugned order. Accordingly, present revision petition having no merits stand dismissed. No order as to cost.17. ......................J

    V.B. GUPTA PRESIDING MEMBER ...................... PREM NARAIN MEMBER

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    Harpal Arya v. Housing Board Haryana Estate
    (Jan 4, 2016)