Punjab Urban Planning
& Dev. Authority Vs. Bhupinder Singh  INSC 1119 (14 July 2008)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No.7727 of 2002 Punjab Urban
Planning & Development Authority ...
Singh ...Respondents With Civil Appeal No. 7728 of 2002 Civil Appeal No. 7730
of 2002 Civil Appeal No. 7726 of 2002 Civil Appeal No. 7729 of 2002 & C.A.
No....... of 2008 (Arising out of SLP(C) No. 7280 of 2002
Appeal Nos. 7726 to 7730 arise out of a common order dated 18th September,
2001, passed 2 by the National Consumer Disputes Redressal Commission in
respect of Revision Petitions Nos. 1056, 1057, 1058, 1136 and 1055 of 2001.
Special Leave Petition (C) No. 7280 of 2002 arises out of a similar order of
the National Commission dated 7th November, 2001, passed in Revision Petition
No. 1743 of 2001. Since the five appeals arise out of a common order of the
National Commission and the issue involved in the special leave petitions is
the same, all the six matters were taken up for hearing and final disposal
together. Leave is granted in Special Leave Petition (C) No. 7280 of 2002.
will appear from the materials on record, in 1989 the Punjab Urban Planning and
Development Authority (hereinafter referred to as the "PUDA"), the
appellant herein, invited applications from persons who wished to acquire
Higher Income Group (Single Storey) category houses at Phase IX SAS Nagar.
Interested applicants were required to deposit a sum of Rs.4,000/- while making
such application. In 3 the advertisement inviting applications, it was
categorically mentioned that no interest would be payable on the earnest money.
About 5416 applications were received by PUDA in response to the said advertisement
and draw of lots for houses immediately available in Phase IX SAS Nagar was
held on 10th November, 1989.
According to PUDA,
the information sheet, supplied along with the prescribed application forms,
made it clear that allotment of houses would be made on the basis of draw of
lots and that the deposit of earnest money would not create any vested right of
allotment to any of the applicants. According to PUDA, earnest money was
refunded to those unsuccessful applicants who desired that their earnest money
be returned to them. However, out of the unsuccessful applicants, 1965
applicants did not seek refund of their earnest money.
transpires that in 1991 the Department of Housing and Urban Development of the
Government of Punjab was merged with the Punjab Housing 4 Development Board.
In 1995, the Punjab Housing Development Board which had been constituted under
the Punjab Housing Development Board Act, 1972, was abolished by virtue of the
provisions of the Punjab Regional and Town Planning and Development Act, 1995
(hereinafter referred to as "the 1995 Act"). The Punjab Urban and
Development Authority was thereafter constituted with effect from 1st July,
1995, under the provisions of the 1995 Act and was given the responsibility for
the effective and planned development of housing schemes and for undertaking
Urban Development and Housing Programmes for establishing new towns in the
State of Punjab. It appears that on account of non- availability of suitable
land with PUDA, no High Income Group Scheme could be formulated for
construction of Higher Income Group houses between 1989 and July, 1996.
1996 PUDA formulated a scheme for construction of 354 Higher Income Group
Houses on land available in Sector 70 SAS Nagar. It 5 also appears that under
Section 23 of the 1995 Act, the authority is competent to appoint one or more
committees for securing efficient discharge of the functions of the authority.
Under Regulation 8 of
the Punjab Urban Planning and Development Authority (Committees and Conduct of
Business) Regulations, 1996, the Finance and Accounts Committee was duly
constituted to perform the function of determining prices and policies for
disposal of land, plots and houses, besides discharging other functions. The
said committee at its meeting held on 24th July, 1996, considered the question
of disposal of the proposed 354 partially finished duplex houses in Sector 70,
SAS Nagar and took the following decision:
"Item No. 9.07.
Disposal of 354 independent partially finished duplex houses in Sector 70, SAS
Nagar. Approved with the modification that 154 houses be offered to old
applicants and 200 to fresh applicants at present rates. It may be ensured that
money deposited by old or new applicants be refunded to all unsuccessful
applicants immediately after draw of lots."
to the aforesaid decision, a public notice was published in the Tribune on 12th
September, 1996, wherein it was announced that the applicants who had applied
in 1989 for Higher Income Group Scheme by deposit of Rs.4,000/- and had not
received refund of the same would be considered for allotment by draw of lots
for 154 such houses in Sector 70, SAS Nagar. Subsequently, on 20th September,
1996, it appears that those applicants who had participated in the draw of lots
on 10th November, 1989, and had not withdrawn their earnest money, were
included in the draw of lots for the 154 Higher Income Group Houses in Sector
70 SAS Nagar.
all the applicants who were successful in the draw of lots conducted on
20.9.1996 were issued allotment letters and those who were unsuccessful were
returned the earnest money of Rs.4,000/- which had been deposited by them.
Since the said
earnest money was returned by 7 PUDA without any interest calculated
thereupon, some of the unsuccessful candidates filed complaints before the
District Forum complaining that despite having retained the earnest money of
Rs.4,000/- since 1989, PUDA had refunded only the said amount without any
interest thereupon. The complainants in the several complaints claimed
compensation from PUDA in respect of the earnest money deposited by them by way
of interest at the rate of 24% per annum apart from compensation for
harassment, mental agony and inconvenience. The applicants also prayed for
costs of the proceedings.
appellant herein contested the several proceedings initiated by the
unsuccessful applicants and took a plea that no interest was required to be
paid on the amount deposited by the complainants on account of the fact that it
had been categorically mentioned in the advertisement inviting applications
that no 8 interest would be payable on the earnest money.
On the basis of the
evidence before it the District Forum allowed the complaints and awarded a cost
of Rs.550/- in each case and also directed PUDA to pay interest on the amount
deposited as earnest money at the rate of 18% per annum for the period up to
the date of payment of the total amount to the complainants, less a period of
two years from the date of deposit.
by the aforesaid order of the District Forum, PUDA filed appeals before the
Consumer Disputes Redressal Commission, Chandigarh. The submissions made before
the District Forum that interest was not payable on the earnest money was
reiterated and it was also indicated that since the earnest money deposited by
the respondents in 1989 had not been returned to them, as the respondents had
not asked for refund of the same, they had been given a second opportunity to
participate in the draw of lots on the basis of their original 9 deposit,
although, the deposits for participating in the subsequent draw of lots held on
20.9.1996 was much higher. PUDA's case appears to be that on the strength of
the earnest money deposited once the respondents had been given two
opportunities to participate in the draw of lots and that it could not,
therefore, be contended that the said sums deposited by way of earnest money
had been retained by PUDA with an ulterior objective in mind.
with the view expressed by the District Forum and relying upon the decision of
the National Commission in the case of S.P. Davaskar vs. Housing Commissioner
Karnataka Housing Board, reported in 1977 CCJ 360, the Appellate Forum came to
the conclusion that according to the law as explained by the National
Commission in its above decision, PUDA was required to pay interest on the
amounts deposited which were kept by the Board for a period of 2 years or more.
The Consumer 10 Disputes Rederessal Commission, Chandigarh, accordingly
dismissed the appeals preferred by PUDA upon holding that the District Forum
had rightly allowed the interest at a rate which was neither excessive nor
said decision of the Consumer Disputes Redressal Commission, Chandigarh was
challenged by PUDA before the National Consumer Disputes Redressal Commission,
New Delhi, by way of Revision. The same was, however, dismissed by the National
Commission which agreed with the decision of the District Forum directing PUDA
to pay interest on the deposits made in 1989 and left unreturned till 1996, at
the rate of 18% per annum for the period commencing from two years after the
date of deposit till the date of payment.
is against the said order of the National Commission that the present appeals
have been filed.
at the outset it was submitted on behalf of PUDA that the proceedings taken by
the 11 respondents before the Consumer Forum were invalid and ought not to
have been entertained by the District Forum, inasmuch as, no case of deficiency
of service had been made out on behalf of the respondents to attract the
provisions of the Consumer Protection Act, 1986. Appearing for the appellant,
Ms. Rachna Joshi Issar submitted that it had been consistently held by this
Court that the onus of proving deficiency of service is upon the complainant
seeking relief under the Consumer Protection Act. The respondent did not have
any vested right of allotment unless they succeeded in the draw of lots. It was
submitted that the respondents on their application had only a right to be
considered for allotment if they were otherwise eligible and that they have
been so considered for allotment on 10.11.1989 and also on 20.9.1996 when the
earnest money was fixed at Rs.62,700/-, as against Rs.4,000/- deposited by them
at the time of the first draw of lots held 12 on 10.11.1989. Ms.Issar urged
that neither had any malafide been alleged or proved against PUDA in the
conduct of proceedings relating to the draw of lots on both the dates.
Accordingly, in the
absence of any case for deficiency of service or breach of contract made out by
the applicants, the application before the District Forum was entirely
misconceived and wholly without jurisdiction.
also urged that when initially the draw of lots was held on 10.11.1989, those
unsuccessful applicants who desired refund of their earnest money were given
such refund immediately. Out of the unsuccessful candidates 1965 applicants did
not seek refund of their earnest money which was retained by PUDA to give such
applicants an opportunity to participate in the next draw of lots. Mr. Issar
also reiterated that in the advertisement inviting applications it had been
clearly indicated that no interest would be payable on the earnest money
deposited and that having 13 regard to the above the respondents should have
asked for refund of the amount deposited by them without waiting for the same
to be refunded by PUDA.
Issar submitted that the respondents should not be allowed to approbate and
reprobate in the same breath having participated in the second draw of lots on
the basis of the earnest money deposited by them earlier, and, on the other
hand, claiming interest thereupon after being unsuccessful in the draw of lots.
Ms. Issar submitted that this amounted to malice in law and the claim of the
respondents, instead of being allowed, should have been rejected with
this stage it may be indicated that when the appeals were taken up for final
hearing on 3.4.2008, no one appeared on behalf of the respondents in any of the
appeals, and, accordingly, fresh notices were issued to the respondents
indicating that in the event they were not represented on the next date of 14
hearing, the appeals would be heard and disposed of finally in the absence of
the respondents. The Office Report dated 5.5.2008, indicates that notices had
been issued to all the respondents on 9.4.2008 but neither the AD Cards nor the
unserved covers have been received back. Since one month had expired when the
appeals were again listed for hearing and still no one was present on behalf of
the respondents, the appeals were taken up for hearing in their absence.
the materials placed before us by Ms.Issar, the admitted position is that the
earnest money deposited by the respondents in 1989, when making applications
for acquiring Higher Income Group (Single storey) Category Houses at Phase IX,
SAS Nagar, had not been returned to the respondents, while in other cases the
same was returned to the applicants. The explanation given by PUDA that such
earnest money was refunded to those who had claimed such refund, but was not
refunded to those who 15 did not, is not very convincing. It cannot, however,
be overlooked that the respondents did get the benefit of such retention by
being permitted to participate in the draw of lots held for the second time on
20.9.1996. Apart from that, there is also no explanation as to why the
respondents had not asked for refund of the earnest money and allowed the same
to remain with PUDA.
the respondents did not object to the contents of the public notice published
in the "Tribune" on 12th September, 1996, categorically indicating
that those applicants who had earlier applied for allotment of Higher Income
Group Houses and had not withdrawn the deposit of Rs.4,000/- made by them would
also be included in the draw of lots scheduled to be held on 20th September,
1996 for 154 such houses in Sector 70 SAS Nagar. On the other hand, the
respondents allowed themselves to be included in the draw and only when they
proved to be unsuccessful, then they moved the 16 Consumer Forum contending
that they were entitled to interest on the deposit which had been made in 1989
and had not been returned to them by PUDA. Of course, there is also nothing on
record to show that the respondents had even asked for return of their
individual deposits of Rs.4,000/-, with or without interest thereupon, from
PUDA before the same was returned to them after they were unsuccessful in the
second draw of lots. Despite, the stipulation in the advertisements that no
interest would be paid on the earnest money, the District Forum allowed the
complaints made by the respondents and awarded cost in each case together with
interest at the rate of 18% per annum for the period from the date of deposit
up to the date of payment of the total amount, less a period of two years from
the date of deposits. Since no one had appeared on behalf of PUDA before the
District Forum, the matter was proceeded with ex-parte and merely upon
recording that it was specified that PUDA 17 had retained the amount of
Rs.4,000/- from 10th March, 1989 till 19th January, 1997, without any
reasonable cause, which amounted to deficiency in service on the part of PUDA,
it granted interest to the complainant at the rate of 12% in the manner
indicated herein above.
the appeal filed by PUDA the State Commission did not give much importance to
the stipulation contained in the advertisement that no interest would be
payable on the registration fee, and without taking into account the fact that
on the basis of the said deposits the respondents had been included in the
second draw of lots, affirmed the order passed by the District Forum mainly on
the basis of a decision of the National Commission in the case of S.P. Davaskar
(supra) the facts of which are not only distinguishable but completely
different from the facts of the present case.
the facts of the other decision of the National Commission in the case of
George 18 Authority and Anr., [1999 (1) CPC 183], relating to payment of
interest on deposited amounts, is distinguishable on facts. If the facts, which
are peculiar to this case, are taken into consideration, the retention of the
earnest money by PUDA cannot be brought within the ambit of the two aforesaid
decisions. The retention of the amount in this particular case was pursuant to
a policy which allowed the depositors, who had not withdrawn their deposit, to
participate in a subsequent draw of lots without having to pay anything more
than what had been deposited by them, even though the amount of deposit may
have gone up several times.
our view, the single most important aspect of this case is that on the failure
of the respondents to ask for refund of the deposited amount within a
reasonable time, the same was not refunded to them by PUDA. Not having asked
for such refund, the respondents cannot also 19 take advantage of their lapse.
If the respondents had succeeded in the second draw of lots, this question,
which has been raised on their behalf before the Consumer Forum might never
have arisen. In our view, it will be inequitable to saddle the appellants only
with the responsibility of non-refund of the earnest money between 10th March
1989 and 19th January, 1997.
therefore, allow the appeals in part and direct that the rate of interest
payable by the appellant, as directed by the District Forum and upheld by the
State Commission, at the rate of 18% per annum from the date of deposit till
the date of actual payment shall stand reduced to 10% for the period in
question. The cost of litigation granted by the District Forum is also set
will be no order as to costs.
(Altamas Kabir) ..................J.
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