TMI Blog2007 (5) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... ers' referred to in section 2(o) of the Act. But this Court did not examine or deal with the question whether a contract for sale of a house premises, (that is site with a constructed house), as contrasted from a contract of construction amounted to 'providing a service of any description to a potential user including housing construction'. Be that as it may. Though there appears to be some logic in the contention of BDA, we do not propose to decide the issue, as we are allowing this appeal on other grounds, and as this contention was not specifically pressed before the Commission. We leave this question open for decision in an appropriate case. Allow this appeal and set aside the order dated 11.4.2002 of the National Consumer Disputes Redressal Commission. As the main prayer for completion and delivery of the houses was complied with during the pendency of the complaint, and as we have held that respondent is not entitled to interest or compensation, the complaint is disposed of with a direction to BDA to complete the process of execution and registration of sale deed/s in respect of the houses without claiming any extra cost, within three months from today. The cost of stamp d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surrender of allotment of the 125 LIG units. The cost of 15 HIG houses was Rs.73.5 lakhs (that is, three corner units at the rate of Rs.5.5 lakhs each and 12 other units at the rate of Rs.4.75 lakhs each). The respondent had paid a sum of Rs.19,33,925/- in advance towards the cost of the 15 H.I.G. houses and the balance due was Rs.54,16,075/-. By letter dated 15.5.1989, BDA adjusted and appropriated the said sum of Rs.54,16,075/- (due in respect of 15 HIG Houses) and a sum of Rs.21,66,250/- (due in respect of MIG Units), from out of Rs.98,85,210/- paid towards LIG units, and refunded the balance of Rs.23,02,885/- to the Respondent. Thus it would be seen that the cost of H.I.G. units was received by BDA only on 15.05.1989. 6. BDA delivered 4 HIG houses in December, 1989 and May, 1990. The completion of construction and delivery of remaining 11 H.I.G. houses (in RMV Extension, Bangalore) was delayed. By letters dated 29.11.1989, 17.01.1990, 9.7.1993 and 11.1.1994, the Respondent pointed out the delay in delivery of the HIG houses and requested for early delivery of possession of the houses. Respondent also demanded interest on the price paid, at the bank rate from 01.01.1986 till ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . After making all possible efforts to persuade the contractor to take up and complete the work, it rescinded the contract with the contractor by Resolution dated 15.2.1995 and took steps to get the work completed through an alternative agency. The delay was thus for reasons wholly beyond its control and unintentional, and there was no breach. c) It would complete and deliver the 11 houses within a short time at the agreed price, though price of the houses had risen by 10 times. d) As it was executing the self-financing housing scheme on 'no profit no loss' basis, it should not be burdened with any financial liability for any delay. e) Even if it was treated as a service provider and the complaint was held to be maintainable, as there was no negligence or deficiency in service on its part, it was not liable to pay any interest or compensation. 9. During the pendency of the complaint before the commission, BDA delivered one HIG house on 21.1.1997 and remaining 10 HIG houses on 12.3.1997. The Respondent thus secured the main relief sought in the complaint. What remained was the claim for interest and compensation. Parties led evidence by way of affidavits. Neither party sough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of each case. (b) Where no time is stipulated for performance of the contract (that is for delivery), or where time is not the essence of the contract and the buyer does not issue a notice making time the essence by fixing a reasonable time for performance, if the buyer, instead of rescinding the contract on the ground of non-performance, accepts the belated performance in terms of the contract, there is no question of any breach or payment of damages under the general law governing contracts. However, if some statute steps in and creates any statutory obligations on the part of the development authority in the contractual field, the matter will be governed by the provisions of that statute. (c) Where an alternative site is offered or delivered (at the agreed price) in view of its inability to deliver the earlier allotted plot/flat/house, or where the delay in delivering possession of the allotted plot/flat/house is for justifiable reasons, ordinarily the allottee will not be entitled to any interest or compensation. This is because the buyer has the benefit of appreciation in value. (d) Though the relationship between Development Authority and an applicant for allotment is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief and in moulding the relief, the following among other relevant factors should be considered : (i) whether the layout is developed on 'no profit no loss' basis, or with commercial or profit motive; (ii) whether there is any assurance or commitment in regard to date of delivery of possession; (iii) whether there were any justifiable reasons for the delay or failure to deliver possession; (iv) whether the complainant has alleged and proved that there has been any negligence, shortcoming or inadequacy on the part of the developing authority or its officials in the performance of the functions or obligations in regard to delivery; and (v) whether the allottee has been subjected to avoidable harassment and mental agony. Whether Respondent is entitled to interest? 11. At the outset, we may notice that there is some vagueness in the order of the Commission, in regard to the period for which interest is awarded. The Commission has awarded interest at the rate of 18% per annum commencing from the expiry of two years after the deposit of 'last installment' of Rs.53 lakhs. The sum of Rs.53 lakhs was not paid in installments as assumed by the Commission. BDA recovered Rs.54,16,075/- due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r decision in Darsh Kumar, cannot be sustained. 13. As already noticed, where the grievance is one of delay in delivery of possession, and the Development Authority delivers the house during the pendency of the complaint at the agreed price, and such delivery is accepted by the allottee-complainant, the question of awarding any interest on the price paid by him from the date of deposit to date of delivery of possession, does not arise. The allottee who had the benefit of appreciation of price of the house, is not entitled to interest on the price paid. In this case, the 11 houses were delivered in 1997 at the agreed prices (Rs. 5.5 lacs per corner HIG House and Rs.4.75 lacs per other HIG Houses). In view of it, the order of the Commission awarding interest at 18% per annum on the price of the houses is unsustainable and liable to be set aside. Whether respondent is entitled to any compensation? 14. This leads us to the next question as to whether the Respondent is entitled to any compensation, to make good the loss caused to him on account of the delay in delivery. The loss is the rental income which the houses would have fetched if they had been delivered earlier from the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (the first six installments being Rs.862327/- and the last installment being Rs.862288/-). It also incidentally stated that the houses would be ready for occupation in December, 1986. The installments were not paid and respondent itself was the defaulter. Nevertheless, BDA allotted 15 houses as per intimation dated 27.5.1987. In a self-financing scheme, the installments paid by the allottees are used for construction. If an allottee does not pay the installments, he cannot obviously expect completion of construction. In this case, the payment was received by BDA (without charging any interest) by way of adjustment on 15.5.1989. Even if the reasonable period for construction is taken as two years, BDA had to explain the 'delay' only from 15.5.1991 and not from 1985 as assumed by the Commission. BDA delivered four houses in time, that is in 1989 and 1990. It did not deliver the remaining 11 houses, as its contractor delayed execution of the work. It may be mentioned that the project contemplated construction of 558 HIG houses and the work got stuck only in regard to 68 houses (including the 11 houses to be delivered to the Respondent). When the respondent wrote letters in 1989, 1990, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... executed and the matter is kept pending in view of the pendency of the dispute. Conclusion 19. Before concluding, it is necessary to refer to one more contention urged by BDA. It contended that when a person enters into a contract for purchasing a house (land with building), from a Development Authority, the allottee does not 'hire or avail of a service' and is not a 'consumer' under the Act. It is contended that where the contract is for sale of a house (land with building) as contrasted from a contract for construction of a house by a contractor with the site-owner, the seller is not a service provider, and the purchaser is not a consumer; and sale of land with a building constructed by a development authority, involves neither sale of goods, nor hiring/availing of any services. BDA had specifically raised this contention before the Commission as a preliminary objection regarding maintainability of the complaint. It appears that this contention was not pressed before the Commission nor raised as a specific ground in the special leave petition, in view of the decision of this Court in Lucknow Development Authority vs. M. K. Gupta (Supra). In that case, a two-Judge Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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