2009 (3) TMI 862
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....n). The Estate Officer, Union Territory Chandigarh Administration issued an advertisement notifying the auction of 74 residential sites and 71 commercial sites in different sectors of Chandigarh, on leasehold basis subject to the General Terms and Conditions regarding auction. The relevant terms were :- (i) The auction was for grant of a lease of sites for 99 years. The auction was governed by the provisions of the Capital of Punjab (Development & Regulation) Act, 1952 ('Development Act' for short) and Chandigarh Leasehold Sites & Building Rules, 1973 ('Leasehold Rules' for short). (ii) In addition to the premium for lease (to be offered by bids), the lessee had to pay annual rent at the rate of 2.5% of the premium for the first 33 years, liable to be raised to 3.375% of the premium for the next 33 years and 5% of the premium for the remaining 33 years; (iii) 25% of the bid amount had to be paid by demand draft or cash at the fall of the hammer. The remaining 75% premium could be paid either in a lump sum with 30 days of the auction without any interest, or at the option of the lessee, in three equated annual instalments along with interest at 10% per annum, the first instalment....
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....Rs.616,736/- plus Rs.51,125/- on 9.1.1998, Rs.168,000/- on 4.3.1999 and Rs.200,000/- on 12.5.1999. They alleged that the appellant did not provide any amenities in regard to the site, and as a result they had suffered huge losses. They contended that until the basic amenities were provided, the appellants were not legally entitled to claim the balance of premium or the annual rent. They sought the following directions to the appellants: (i) Not to recover the balance amount of premium or the interest on the premium or the ground rent until the basic amenities (approach road, sewerage, ground water, street light, electricity, parking space) were provided. (ii) To provide the basic amenities so as to enable them to raise a construction on the site. (iii) To pay compensation of Rs.10 lacs for harassment and blocking of various payments made by them. (iv) To pay interest at the rate of 18% per annum on the amounts paid by them, from the date of payment till all the basic amenities were provided. 5. The appellants filed a reply resisting the complaint. It was submitted that the respondents, having accepted the terms and conditions of lease contained in the conditions of auction and....
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....d certificate is issued. (vi) The amount deposited by the complainants shall earn interest @ 18% per annum till the essential requirements were provided. [Note: Providing of "plinth level" directed by UT Commission apparently refers to filling up of low lying sites so as to bring them to the road level.] 7. Feeling aggrieved, the appellants filed an appeal before the National Commission. The National Commission allowed the appeal in part by a common order dated 21.2.2005, and modified and restricted the reliefs granted by the U.T. Commission as follows: (1) The Chandigarh Administration shall reschedule the recovery of three instalments and recover the same on- (i) 1.5.2005, (ii) 1.5.2006 and (iii) 1.5.2007. (2) Complainants shall pay interest @ 10% on the instalment amounts from the date of taking possession of the plot. This would be in conformity with condition No.5 of the allotment letter which provides that balance of 75% of the premium is to be paid with 10% interest. (3) The complainants shall also pay the ground rent as per the prevailing rules. However, the National Commission made it clear that: (a) No penalty shall be levied for delayed payment of instalments ....
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.... was not justified in interfering with the terms of the contract of lease and giving relief in regard to interest, which was legally due. Re: first contention 10. A 'complaint' is maintainable before a consumer forum under the Consumer Protection Act, 1986, by a 'complainant' ('consumer' or others specified) against a 'trader' or 'service provider'. The terms 'complainant' 'complaint' 'consumer' 'trader' and 'service' are defined in clauses (b),(c), (d),(q) and (o) of Section 2 of the Act. Therefore, a consumer forum will have jurisdiction only when: (i) the complainant is a 'consumer' as defined in clause (d) or a person specified in clause (b) of section 2 of the Act; (ii) the respondent is a 'trader' as defined in clause (q) or a provider of 'service' as defined in clause (o) of section 2 of the Act; and (iii) the 'complaint' relates to any of the matters specified in clause (c) of section 2, for obtaining any relief provided by order under the Act. It therefore follows that where the complainant is not a 'consumer' (or a person specified in clause (b) of section 2), or where the respondent is not a 'trader' or 'service provider' or where the complaint does not relate to ma....
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....nial of service. Such disputes or claims are not in respect of immovable property as argued but deficiency in rendering of service of particular standard, quality or grade. Such deficiencies or omissions are defined in sub-clause (ii) or clause (r) of Section 2 as unfair trade practice. xxxxx 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 users'. A person who applies for allotment of a building site or for a flat constructed by the development authority or enters into an agreement with a builder or a contractor is a potential user and nature of transaction is covered in the expression 'service or any description'. It further indicates that the definition is not exhaustive. The inclusive clause succeeded in widening its scope but not exhausting the services which could be covered in earlier part. So any service except when it is free of charge or under a constraint of personal service is included in it." (emphasis supplied). 11.2 In Ghaziabad Development Authorit....
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....on for the sale or lease, and not consideration for any service or for provision of any amenity or for sale of any goods. 13. In Lucknow Development Authority, it was held that where a developer carries on the activity of development of land and invites applications for allotment of sites in a developed layout, it will amount to 'service', that when possession of the allotted site is not delivered within the stipulated period, the delay may amount to a deficiency or denial of service, and that any claim in regard to such delay is not in regard to the immovable property but in regard to the deficiency in rendering service of a particular standard, quality or grade. The activity of a developer, that is development of land into layout of sites, inviting applications for allotment by assuring formation of a lay out with amenities and delivery of the allotted sites within a stipulated time at a particular price, is completely different from the auction of existing sites either on sale or lease. In a scheme for development and allotment, the allottee has no choice of the site allotted. He has no choice in regard to the price to be paid. The development authority decides which site shoul....
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.... 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 does not relate to any matter in regard which a complaint can be filed. Therefore, any grievance by the purchaser/lessee will not give rise to a complaint or consumer dispute and the fora under the Act will not have jurisdiction to entertain or decide any complaint by the auction purchaser/lessee against the owner holding the auction of sites. Re : Second Contention 15. The complaint by the respondents proceeded on the assumption that there was an obligation on the part of the appellants to provide amenities in the nature of approach road, water supply lines, drainage system, rainwater drainage and electricity and that unless such amenities were provided, they were not liable to pay the premium or interest on the premium or the ground rent. As noticed above, neither the terms and conditions of auction, nor the advertisement relating to the auction, nor the letter of allotment contained any assurance regarding provisions of any such amenities with reference to the sites put up fo....
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....ction 3 which relates to transfer of land by sale or lease by the government. The term 'amenity' is referred only in sections 6 and 7 which are extracted below: "6. Power to require proper maintenance of site or building. - If it appears to the Chief Administrator that the condition or use of any site or building is prejudicially affecting the proper planning of, or the amenities in, any part of Chandigarh or the interests of the general public there, he may serve on the transferee or occupier of that site or building a notice requiring him to take such steps and within such period as may be specified in the notice and thereafter to maintain it in such a manner as may be specified therein. 7. Levy of fee or tax for amenities. - (1) For the purposes of providing maintaining or continuing any amenity at Chandigarh the central government may levy such fees or taxes as it may consider necessary (which shall be in addition to any free or tax for the time being leviable under any other law) in respect of any site or building on the transferee or occupier thereof. (2) If the central government considers it necessary or expedient so to do having regard to the fact that the transferee or....
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....igarh Administration may demise sites and buildings at Chandigarh on lease for 99 years. Such leases may be given by allotment or by auction in accordance with these Rules. x x x x x x 6. Commencement and period of lease. - The lease shall commence from the date of allotment or auction as the case may be, and shall be for a period of 99 years. After the expiry of said period of 99 years the lease may be renewed for such further period and on such terms and conditions as the Government may decide. x x x x x x 8. Lease by allotment, Procedure for: xxx (not relevant) x x x 9. Lease by auction, procedure for.-In case of auction, at least 25 per cent of the bid accepted by the auctioning officer shall be paid on the spot by the intending lessee in the prescribed mode of payment in accordance with Rule 12: Provided that the Estate Officer may, in his absolute discretion, allow the successful bidder to deposit in the prescribed mode of payment not less than 10 per cent of the bid on the condition that the difference between the amount deposited and 25 per cent of the bid shall be deposited in the same manner within 30 days of auction. 9A Extension of period : xxx (not relevant) xxx....
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....he premium for the next 33 years and to 5 per cent of the premium for the remaining period of the lease. (ii) Rent shall be payable annually on the due date without any demand from the Estate Officer: Provided that the Estate Officer may for good and sufficient reasons extend the time for payment of rent upto six months on the whole on further payment of 6 per cent per annum interest from the due date upto the date of actual payment. (iii) If rent is not paid by the due date, the lessee shall be liable to pay a penalty not exceeding 100 per cent of the amount due which may be imposed and recovered in the manner laid down in section 8 of the Capital of Punjab (Development and Regulation) Act, 1952, as amended by Act No.17 of 1973. 14. Execution of lease deed.-(1) After payment of 25 per cent premium the lessee shall execute a lease deed in Form B, B-I, B-II or C, as the case may be, in such manner as may be directed by the Estate Officer within six months of the date of allotment/auction or within such further period as the Estate Officer may, for good and sufficient reasons, allow. 17. The National Commission has proceeded on erroneous and baseless assumptions that ther....
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....read as laying down the proposition that the allottee is not required to pay the insalments of premium with interest and ground rent in accordance with the terms and conditions of allotment and Rule 12 of the Rules till each and every amenity enumerated in Section 2(1) is made available at the site. The obligation of the Administration to provide approach road, water supply, electricity, sewerage, storm water drainage can be read as implicit in the scheme of the Act and the Rules, but it cannot be said that the allottee is entitled to withhold the payment of instalments on the ground of lack of particular amenity at the site. If the basic amenities, like water, electricity and approach road are not available at the site and on that account it is not possible to construct the building, the allottee can represent to the Administration that he may not be burdened with the liability of ground rent and may not be penalized for non-construction within the specified time. After completion of building, he can represent for waiver of ground rent in case facility of sewerage has not been provided. However, after taking possession of the site and constructing the building, he cannot avoid his....
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....expression "premium" appearing in the present context does not mean that the allottees/ lessees cannot enjoy the immovable property without those amenities being provided. The word "enjoy" here in the present context means that the allottees have a right to use the immovable property which has been leased out to them on payment of premium i.e. the price..... It is the common experience that for full development of an area it takes years. It is not possible in every case that the whole area is developed first and allotment is served on a platter. Allotment of the plot was made on an asis- where-is basis and the Administration promised that the basic amenities will be provided in due course of time. It cannot be made a condition precedent. This has never been a condition of the auction or of the lease. As per the terms of allotment upon payment of the 25 per cent, possession will be handed over and rest of the 75 per cent of the leased amount to be paid in a staggered manner i.e. in three annual equated installments along with interest at the rate of 10 per cent. If someone wants to deposit the whole of the 75 per cent of the amount he can do so. In that case, he will not be requir....
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....ly and as possession of "developed sites" was yet to be given, the state government could not charge interest. The state government, on the other hand, contended that charging of interest was not correlated to the delivery of possession under the Punjab Urban Estates Sale of Rights Rules, 1965 and having regard to Rule 12(2) of the Rules, interest accrued from the date of issue of an allotment order. Interpreting the said provisions, this Court held that while interest could not be demanded till possession was offered, it was not necessary that such offer should be of fully developed plots. This Court held :- "As the offer had stated that modern amenities noted above "will be provided", it cannot be held that till the amenities as mentioned have become fully functional, the offer is incomplete. It is for this reason that the fact that full development has not yet taken place, even if that be the position as contended by Shri Bhandare, cannot be a ground to hold that interest has not become payable. It is true that the applicants were given to understand that the amenities noted above would become available (and within reasonable time), the fact that the same did not become availab....
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....paid promptly and avoid misuse of the concession given by permitting payment in instalments. But for such a provision, lessees/allottees who have already been given possession, will be tempted to delay payments, thereby leading to continuous defaults. A statutory development authority, working on no profit no loss basis, can ill afford to permit such continuous defaults by lessees/allottees, which will paralyse their very functioning, thereby affecting future developmental activities for the benefit of other members of the general public. Therefore a provision for interest as contained in clause 6 of the lease-cum-sale agreement is neither inequitable nor in terrorem. Where the basic rate of interest is itself very high, or where interest is charged on the entire price instead of charging interest on the reducing balance, when working out the equated instalments, or where the rate of interest on default is punitively excessive, the position may be different. But no such case is made out by the respondent." 22. In this case, having regard to the provisions in the leasehold Rules and contractual terms (as contained in the General terms and conditions of auction lease and the letter ....
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.... to pay the same. However, so far as the question of payment of penalty and penal interest is concerned, that shall depend on the facts of each case to be examined by the High Court. The High Court shall examine each individual case and consider grant of proportionate relief." The above observations and directions were apparently on the special facts and circumstances of that case. As noticed above, in Shantikunj, the auction was of the year 1989. The Lessee had approached the High Court in its writ jurisdiction in the year 1999 seeking amenities. Even in 2006 when this Court heard the matter, it was alleged that the amenities had not been provided. It is in those peculiar facts that this Court obviously thought fit to give some reliefs with reference to penal interest wherever amenities had not been provided at all even after 17 years. In fact, this court made it clear while remanding to High Court that wherever facilities/amenities had been provided before the date of the judgment (28.2.2006), the lessees will not be entitled to any reliefs and where the facilities/amenities had not been granted even in 2006, the High Court may consider giving some relief by proportionate reduct....