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2009 (3) TMI 862 - SC - Indian LawsA 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 . - Where a public development authority having invited applications for allotment of sites in a lay out to be formed or for houses to be constructed and delivered, fails to deliver possession by forming the lay out of sites or by constructing the houses within the stipulated period, the delay may amount to a deficiency in service by treating the development authority as a service provider and the allottee as the consumer.
Issues Involved:
1. Maintainability of the complaint under the Consumer Protection Act, 1986. 2. Obligation of the appellants to provide basic amenities. 3. Rescheduling of lease premium instalments and interest on delayed payments. 4. Rate of default interest applicable. Issue-wise Detailed Analysis: 1. Maintainability of the Complaint: The appellants contended that the auction of sites did not result in the successful bidder becoming a 'consumer' or the appellants becoming 'service providers'. The Supreme Court agreed, stating that the act of leasing plots by auction did not involve the sale of goods or rendering of any service. The Court noted that the respondents were not 'consumers' as defined under the Consumer Protection Act, and the appellants were not 'service providers'. The Court distinguished between the development authority's obligation in cases of allotment (as in Lucknow Development Authority v. M.K. Gupta) and public auctions of existing sites, where no service or amenity was assured. The Court concluded that the complaint under the Act was not maintainable. 2. Obligation to Provide Basic Amenities: The respondents argued that the appellants were obligated to provide basic amenities such as roads, water supply, and electricity. However, the Court found no statutory or contractual obligation on the part of the appellants to provide such amenities. The relevant terms of the auction and the letter of allotment did not include any assurance regarding the provision of amenities. The Court referred to the Capital of Punjab (Development & Regulation) Act, 1952, and the Chandigarh Leasehold Sites & Building Rules, 1973, concluding that there was no obligation on the appellants to provide amenities with reference to the auction of leasehold rights of sites. 3. Rescheduling of Lease Premium Instalments and Interest: The National Commission had rescheduled the recovery of instalments and interest payments. The Supreme Court, however, held that the lessees were bound to pay the premium and interest as per the original terms of the auction and the letter of allotment. The Court emphasized that payment of interest was not conditional upon the provision of amenities and that the lessees were liable to pay interest at 24% per annum on delayed payments as per the rules. The Court also referred to its previous judgment in Municipal Corporation, Chandigarh v. Shantikunj Investments Pvt. Ltd., which clarified that providing amenities was not a condition precedent for payment of instalments and interest. 4. Rate of Default Interest: The respondents contended that the rate of default interest should be 12% per annum as per Rule 12(3A) of the Leasehold Rules at the time of the auction. The appellants argued that the rate was 24% per annum. The Supreme Court held that the rate of default interest mentioned in Rule 12(3A) as on the date of the auction would apply. If the rule had not been amended to increase the rate to 24%, the lower rate would prevail. The Court allowed the lessees to seek relief if a higher rate had been charged incorrectly. Conclusion: The Supreme Court allowed the appeals by UT Chandigarh, set aside the orders of the National Commission, and dismissed the complaints filed by the respondents as not maintainable. The Court reiterated that the lessees were liable to pay the premium and interest as per the original terms, and there was no obligation on the appellants to provide amenities. The appeals by the lessees seeking further relief were also dismissed.
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