TMI Blog2010 (8) TMI 1157X X X X Extracts X X X X X X X X Extracts X X X X ..... have been filed at pre-decisional stage seeking writ of prohibition; W.P.Nos.5003 of 2010, 5088 of 2010, 5121 of 2010, 5131 of 2010 and 5903 of 2010 are post-decisional cases seeking writ of Certiorari. The facts of each writ petition would be referred to later at the relevant stage. 3. In all the writ petitions, the petitioner raised common questions of law on the maintainability of the consumer cases instituted by the respondents (complainants) as falling beyond the jurisdiction of the consumer fora established under the Consumer Protection Act, 1986 (for brevity the Act ). The writ petitions, therefore, are clubbed and disposed of together by this common order. 4. For the sake of convenience, the sole writ petitioner (common in all the writ petitions) is hereinafter referred to as opposite party and the contesting respondents in each of the writ petitions are hereinafter referred to as the complainants . BRIEF FACTS:- 5. The brief facts which led to the filing of the writ petitions are that the opposite party, carrying on the business of real estate to provide housing plots, invited members of public through paper publication and brochures to purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2 (o) of the Act; and the complaints as to nonregistration of the plots other reliefs as sought for by the complainants would give raise to a common law remedy in a Civil Court. The dispute relates to only residential plots, not a contract for house construction, therefore, the complainant cannot be considered as a consumer as envisaged in Section 2 (1) (d) of the Act. Consumer as defined would relate to goods and services and not to the transfer of immovable property. Transfer of immovable property is under the purview of provisions of the Transfer of Property Act, 1882 and the Indian Contract Act, 1872. The breach of any obligation of the contractor may give raise to enforcement of such obligations by specific performance through a Civil Court. The consumer fora therefore has no jurisdiction to deal with the matters relating to specific performance. The opposite party is not a service provider and did not commit act of deficiency. The learned counsel would further submit that several complaints of similar nature were dealt with by different fora - District Forum I, II and III, Hyderabad and District Forum, Ranga Reddy District and conflicting views were expressed as to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures preferred by the complainants at a cost which included the development charges. The scheme provided both for lump sum with discount and also payment in instalments. Broadly the terms and conditions as annexed to W.P.No.28246 of 2009 are as follows : (conditions relating to development of plots, payment of development charges and registration after final sanction of layout by HUDA/Town and Country Planning Department are common to all the writ petitions.) TERMS AND CONDITIONS 1. Company reserves all rights to accept/to reject any application. 2. ₹ 300/- Membership Fee is non-refundable. 3. The Company sells only fully developed plots. 4. 10% premium is to be paid for a corner plot. 5. Lumpsum payment should be made within one month of submitting the application to avail lmpsum discount facility. 6. Instalment payments must be made by 15th of the month due, failing which the instalments have to be paid with 15% interest. 7. In case of default, the Company reserves the right to cancel allotment of plot (s) and refund the advance deposit amount standing to the credit of the member, after deducting service charges. 8. Regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded the development charges also. The Opposite Party assured that progress on the site would be informed once in six months. The complainant paid ₹ 10,000/- on 07-11-1997, ₹ 60,000/- under receipt dated 20-11- 1997, ₹ 50,000/- under receipt dated 20-12-1997 and ₹ 1,00,000/- under receipt dated 03-01-1998 and finally ₹ 94,600/- under receipt dated 11-02-1998, thus paid the entire cost. After considerable time by letter dated 06-10-2004 the complainant was informed that the HUDA sought for certain clarifications and the Opposite Party is liaisoning with HUDA to ensure the expeditious commencement of the registration passes. Again by letter dated 02-05-2009 the complainant was informed that the approval was still pending and in the meanwhile U.L.C. issued orders declaring the land as surplus land and the efforts were being made for U.L.C. clearance. Pleading that despite paying the entire cost of the plot which included the development charges, the Opposite Party has not registered the plot and resorting to unfair trade practice and deficiency of service causing loss and mental agony, the complainant sought for the reliefs; to register the plot or in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contending that the dispute is of civil nature amenable to the Civil Courts, but not to the jurisdiction of the Consumer Forum. Since several disputed questions are involved, the Consumer Forum cannot decide the same in summary manner. The Complainant is not a consumer and that the Opposite Party does not render any services to the complainant for consideration as required in Section 2 (1) (o) of the Act. The Opposite Party also has not committed any acts of deficiency in service and the amounts paid by the complainant if at all are only towards sale consideration and the other charges paid or payable to the Opposite Party towards development charges and registration charges, which are agreed to be paid by the complainant herself. The Opposite Party has invested huge amounts of money to maintain and upkeep the entire venture and to make it suitable for habitation with all necessary amenities including development of roads, underground sewerage, water supply, parks, electricity round the clock, security etc. The complainant paid the cost of the plot and registration charges as well as the developmental charges etc., as agreed voluntarily without any coercion or undue influence. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted on 23-08-2001 in which the opposite party undertook to register the plots after developing the layout fully with black topped roads, centralized sewage disposal system, lighting and other amenities. The opposite party failed to register the plots despite several requests and the registration was delayed on the pretext of the pendency of approval of layout by the HUDA. The complainant was offered alternate plots at Medchal which is far away from the city to which the complainant declined to accept. On the failure of the opposite party to discharge its obligation, the complainant instituted the consumer dispute alleging deficiency of service and sought for the reliefs; to direct the opposite party to execute and register the sale deed in respect of the said plots or alternatively to pay ₹ 19.00 lakhs towards the present market value; to award a sum of ₹ 1.00 lakh towards damages and compensation for mental agony and for costs. 6. W.P.No.360 of 2010: - Writ of prohibition to interdict proceedings in C.C.No.143 of 2009 on the file of the District Consumer Forum-I, Hyderabad. The complainant was allotted two plot Nos.W44 and W45 in East City, Sector IV, B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he complainant was informed by letter, dated 28.3.2007 to clear the outstanding dues towards cost of development charges, registration charges and interest charges. The opposite party cancelled the allotment and that the complainant is not entitled for the reliefs sought for. The matter was posted for argument to 23-12-2009. 7. W.P.No.364 of 2010: - Writ of prohibition to interdict proceedings in C.C.No.227 of 2009 on the file of the District Consumer Forum-III, Hyderabad. The complainant was allotted plot No.42, Block H in Sector IV in East City, B.B.Nagar, Nalgonda District in the year 1992. In the year 2007, the complainant was informed that initially development of Sector IV was still in progress and on the ground of escalation of costs, the complainant was asked to pay additional charges at ₹ 100/- per square yard to complete the development work, thus burdened with additional amount of ₹ 37,500/- as against ₹ 25,000/- originally fixed. The opposite party increased the amounts from time to time. No development activity was under taken and later in 2008, the opposite party demanded payment of ₹ 1,00,750/- and ₹ 9,600/- towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration would be carried out by June 2001. However, there was no development and progress as such the complainant approached the opposite party to confirm the date of registration. On 28-01-2003, the opposite party informed that the HUDA approval was expected by the 1st week of February 2003 and on 28-02-2004 again informed that final clearance of HUDA was expected shortly. The opposite party, however, kept postponing the registration, but demanded the complainant to deposit ₹ 54,900/- towards registration charges and to pay 18,300/- towards additional development charges. In 2006, again the opposite party informed the complainant that layout approval was pending with HUDA and registration process would be completed after approval. However, on 12-05-2007, the opposite party sent a statement of account informing the complainant that there were dues towards balance of cost, additional development charges and registration charges apart from the maintenance charges, caution deposit and U.L.C. charges. Ultimately, the complainant was informed that HUDA did not grant approval, but the opposite party kept insisting for the payment and although the entire amount was paid in 1998 itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt charges, the opposite party unilaterally enhanced it to ₹ 75,000/- i.e. at ₹ 150/- per square yard, which the complainant paid. The opposite party again enhanced the said charges to ₹ 1,25,000/- at ₹ 250/- per square yard. Despite the same, the opposite party failed to undertake the development works, thus, deficiency of service. The complainant, therefore, sought for reliefs; to pay ₹ 5.00 lakhs as value of the said plots and take back the plots; to pay interest on ₹ 75,000/- and to pay ₹ 25,000/- as compensation for physical and mental harassment suffered and pay ₹ 5,000/- towards litigation costs. The opposite party filed counter. While admitting that the complainant joined as a member for purchasing the plot in the year 1994, it alleged that the complainant failed to pay the development charges as agreed. The complainant has committed breach of contract and failed to perform the obligations under the terms and conditions despite reminders. The dispute involved is contractual in nature in respect of which, the Forum has no jurisdiction. The complainant should rather approach the Civil Court for specific performance. The co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from grabbers by recruiting guards, land was developed by marking plots, laying roads, open drains, sewerage lines, streetlights etc. incurring huge expenditure for which, the complainant is liable to pay apart from registration charges and stamp duty at the prevailing rate. The complainant was informed by letter, dated 28.3.2007 to clear the outstanding dues towards cost of development charges, registration charges and interest charges. The opposite party cancelled the allotment and that the complainant is not entitled for the reliefs sought for. The matter was posted to 05-01-2010 for evidence. 11. W.P.No.305 of 2010: - Writ of prohibition to interdict proceedings in C.C.No.860 of 2008 on the file of the District Consumer Forum-I, Hyderabad. The complainant was allotted plot No.47 in Rolling Meadows Project. The complainant paid full cost of ₹ 3,36,000/- by September 2000. However, the opposite party failed to obtain final approval of the HUDA, but insisted for additional development charges, maintenance charges and C.D/U.L.C. charges. The complainant complied with the demands. The opposite party thereupon executed the sale deed on 30-01-2008. In the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itionally collected with interest and ₹ 20,000/- towards costs of the complaint. The opposite party filed counter and denied the various allegations, stating that it incurred huge expenditure for development of said layout, therefore, demanded amounts towards development charges, maintenance of plot for several years and the complainant failed to pay the development charges and breached the contract. It also raised objection as to the maintainability of the dispute contending that the same is contractual and amenable only to Civil Courts, not to consumer forum. The matter was posted for evidence to 23-12-2009. 13. W.P.No.356 of 2010: - Writ of prohibition to interdict proceedings in C.C.No.864 of 2008 on the file of the District Consumer Forum-II, Hyderabad. The complainant was allotted a plot No.59 in Block QQ Sector- IV of East City. The complainant paid the entire cost of the plot. The complainant further paid the amounts towards development charges at ₹ 100/- per square yard. The opposite party kept the registration postponed and changed the allotment of plot and although the complainant agreed to bear the enhanced registration charges, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount already paid was adjusted towards said plots. The opposite party again demanded additional demand for payment of development charges and registration charges. The complainant complied with the demands of further amounts also and paid ₹ 25,32,000/-. Despite the same, the opposite party insisted for additional development charges. Ultimately, the opposite party cancelled the allotment of plot without any provision even after accepting the entire consideration and development charges. Therefore, the complainant sought for reliefs; to direct the opposite party to register the plots and refund the excess amounts collected and for payment of suitable compensation and costs. The opposite party filed counter. While admitting that the complainant joined as a member for purchasing the plot in the year 1994, it alleged that the complainant failed to pay the development charges as agreed. The complainant has committed breach of contract and failed to perform the obligations under the terms and conditions despite reminders. The dispute involved is contractual in nature in respect of which, the Forum has no jurisdiction. The complainant should rather approach the Civil Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplaint as noted above. 16. W.P.No.5003 of 2010: - To quash the common order of the AP State Consumer Disputes Redressal Commission, Hyderabad, dated 12-08-2009 in C.C.No.2 of 2008. 17. W.P.No.5121 of 2010: - To quash the common order of the AP State Consumer Disputes Redressal Commission, Hyderabad, dated 12-08-2009 in C.C.No.5 of 2008. 18. W.P.No 5131 of 2010 : - To quash the common order of the AP State Consumer Disputes Redressal Commission, Hyderabad, dated 12-08-2009 in C.C.No. 1 of 2008. 19. W.P.No.5903 of 2010: - To quash the common order of the AP State Consumer Disputes Redressal Commission, Hyderabad, dated 12-08-2009 in C.C.No.6 of 2008. 12. The State Commission disposed of the above complaints (C.C.Nos.1,2,5 and 6 of 2008) by a common order, dated 12.8.2009, against which W.P.Nos.5131 of 2010, 5003 of 2010, 5121 of 2010 and 5903 of 2010 respectively, were filed. 13. The complainants in C.C.Nos.1 and 2 of 2008 were allottees of plot Nos.73 and 74 in the venture Central Park-II . The complainants in C.C.Nos.5 and 6 of 2008 were allottees of plot Nos.17 and 170 in Rolling Meadows Project. All the complainants paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms and conditions set out by the seller. The sale is not on as it is where it is basis. The terms and conditions stipulated for sale of only developed plots and the registration of the plots would be made after the sanction of lay out by the concerned authorities. The sale price was not for the virgin land but included the development of sites and provision of infrastructure. The opposite party has undertaken the obligations to develop the plots and obtain permissions/approvals of the lay outs. The opposite party itself pleaded in its counters that the plots were developed by spending huge amounts and subsequent to the amounts paid by the complainants also plots were developed. It pleaded that huge amounts were spent towards protection of the plots from the grabbers and developed roads, open drains, sewerage lines, streetlights etc. It is therefore, manifest that the transaction between the parties is not a sale simplicitor but coupled with obligations for development and provision of infrastructure. Inevitably, there is an element of service in the discharge of the said obligations. 18. The Apex Court in Lucknow Development Authority v. M.K. Gupta (1994) 1 SCC 243 whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, financing practices, quality of goods and services, credit reporting, debt collection, and other trade practices for which state and federal consumer protection laws are enacted. The Act opts for no less wider definition. In construing the meaning of consumer as defined in Section 2(d) of the Act (as it stood before the Amendment Act 62/2002 w.e.f. 15.3.2003, which inserted the words but does not include a person who avails of such services for any commercial purpose ) and the explanation was made applicable to clause (i) and (ii), the Court observed thus: It is in two parts. The first part deals with goods and the other with services. Both parts first declare the meaning of goods and services by use of wide expressions. Their ambit is further enlarged by use of inclusive clause. For instance, it is not only purchaser of goods or hirer of services but even those who use the goods or who are beneficiaries of services with approval of the person who purchased the goods or who hired services are included in it. The legislation has taken precaution not only to define complaint , complainant , consumer but even to mention in detail what would amount to unfair tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all actual or potential users. But the legislature did not stop there. It expanded the meaning of the word further in modern sense by extending it to even such facilities as are available to a consumer in connection with banking, financing etc. Each of these are wide-ranging activities in day to day life. They are discharged both by statutory and private bodies. In absence of any indication, express or implied there is no reason to hold that authorities created by the statute are beyond purview of the Act. When banks advance loan or accept deposit or provide facility of locker they undoubtedly render service. A State Bank or nationalised bank renders as much service as private bank. No distinction can be drawn in private and public transport or insurance companies. Even the supply of electricity or gas which throughout the country is being made, mainly, by statutory authorities is included in it. The legislative intention is thus clear to protect a consumer against services rendered even by statutory bodies. The test, therefore, is not if a person against whom complaint is made is a statutory body but whether the nature of the duty and function performed by it is service or even f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral and individual in particular. The entire approach of the learned counsel for the development authority in emphasising that power exercised under a statute could not be stretched to mean service proceeded on misconception. It is incorrect understanding of the statutory functions under a social legislation. A development authority while developing the land or framing a scheme for housing discharges statutory duty the purpose and objective of which is service to the citizens. As pointed out earlier the entire purpose of widening the definitions is to include in it not only day to day buying of goods by a common man but even such activities which are otherwise not commercial but professional or service-oriented in nature. The provisions in the Acts, namely, Lucknow Development Act, Delhi Development Act or Bangalore Development Act clearly provide for preparing plan, development of land, and framing of scheme etc. Therefore if such authority undertakes to construct building or allot houses or building sites to citizens of the State either as amenity or as benefit then it amounts to rendering of service and will be covered in the expression service made available to potential use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the question of the owner of the site becoming a service provider, does not arise even by applying the test laid down in Lacknow Development Authority or Balbir Singh. The Apex Court observed that 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 cannot be a complaint amenable to the jurisdiction of the fora under the Act. The said judgment on facts has no application to the instant case. 25. A scheme which promotes sale of immovable property coupled with development, obligates the promoter not only to develop the property but also convey title to the purchaser. The obligation to convey title by executing a registered sale deed is an integral part of the scheme and the obligation of the promoter which commences on the acceptance of the offer of the intending purchaser is co-terminus with the execution of the sale deed. Any activity or component of such obligation forms single inseparable transaction. 26. The Apex Court in Bangalore Development Authority (BDA) v. Syndicate Bank (bank) (2007) 6 SCC 711 while consideri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act are required to be interpreted as broadly as possible. It has jurisdiction to entertain the complaint despite the fact that other forums/courts would also have jurisdiction to adjudicate upon the lis. 29. In Secretary, Thirumurugan Coop. Agricultural Credit Society Vs. M.Lalitha (2004) 1 SCC 305 the Apex Court considered the dispute between the appellant cooperative society and its members with reference to the provisions of the Consumer Protection Act vis- vis the provisions of the Tamil Nadu Cooperative Societies Act. The Apex Court after referring to the decisions in Lucknow Development Authority s case (1 supra), Fair Air Engineers (P) Ltd. Vs. N.K.Modi (1996) 6 SCC 385 , Spring Meadows Hospital Vs. Harjol Ahluwalia (1998) 4 SCC 39 and Vishwabharathi House Building Coop. Society (7 supra) held that having regard to the scheme of the Act and purpose sought to be achieved to protect the interest of the consumer better, the provisions are to be interpreted broadly, positively and purposefully in the context of the present case to give meaning to additional/extended jurisdiction, particularly when Section 3 seeks to provide remedy under the Act in addition to ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho enters into an agreement with a builder for construction of an apartment/building and for sharing of the constructed area is a consumer to maintain a complaint against the builder as a service provider, explained the meaning of collaboration agreement , joint venture agreement and held that by availing services of the builder by the land owner for a house construction for consideration to that extent land owner is a consumer, the builder is a service provider and if there is distinction in service in regard to construction, the dispute will be a consumer dispute. If there is a breach by the land owner of his obligations, the builder will have to approach a civil Court as the land owner is not providing any service to the builder but merely undertakes certain obligations towards the builder, the breach of which would furnish a cause of action for specific performance and/or damages. On the other hand, where the builder has committed breach of his obligations the owner has two options. He has the right to enforce specific performance and/or claim damages by approaching the civil Court or he can approach the forum under the Consumer Protection Act for relief as consumer. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
