# '\ U.T. CHANDIGARH ADMINISTRATION & ANR v. AMARJEET SINGH & ORS

- **Citation:** [2009] 4 S.C.R. 541
- **Court:** Supreme Court of India
- **Decided:** 2009-03-17
- **Case number:** Civil Appeal No. 1994 of 2006
- **Bench:** R.V. Raveendran, Markandey Kat Ju
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/u-t-chandigarh-administration-anr-v-amarjeet-singh-ors-25713
- **Pages:** 38

## Headnote

•
Consumer Protection Act, 1986:
Auction for grant of lease of sites - Liability to pay lease
premium instalments and annual rent - If conditional upon c
UT Chandigarh providing basic amenities to sites leased -
Held: It is not conditional -
There is no obligation on
Chandigarh administration to provide amenities with reference.
to lease of sites by public auction - It cannot be said that
instalments could be rescheduled so as to begin after
D
amenities were provided and that interest would start to run
only when lessee takes possession - When instalments are
not paid on due dates, lessees become liable to pay penal
interest from due date to date of actual payment - Rate of
default interest in r. 12(3A) as on date of auction, would apply
- Hence, order of National Commission rescheduling recovery
E
of lease premium instalments and granting certain relief to
"·
lessee in regard to interest, set aside - Capital of Punjab
(Development & Regulation) Act, 1952 -
Chandigarh
Leasehold Sites & Building Rules, 1973.
s. 2 (b), (c), (d), (q) and (o)- Lease of sites by public auction
F
by owner -
Complaint by auction purchaser/(essee -
Maintainability of - Held: Not maintainable - Grievance by
purchaser/lessee will not give rise to consumer dispute- There
is no hiring or availing of services - Purchaser/lessee is not a
'consumer' - Owner is not a 'trader' or 'service provider'.
G
Words and Phrases:
'Amenity' - Meaning of - In the context of s. 2(b) of the
Capital of Punjab (Development and Regulation) Act, 1952.
541
H
542
SUPREME COURT REPORTS
(2009] 4 S.C.R.
A
Respondent-lessees secured leasehold interest in
T
sites belonging to UT Chandigarh in public auctions held
by it. It is alleged that the appellants did not provide any
amenities in regard to the site and as a result the
respondents suffered huge losses. Respondents filed a
B complaint before the Consumer forum that until the basic
amenities-approach road, sewerage, ground water, street
light, electricity, parking spacl:! were provided, the
appellants should not be legally entitled to claim the
•
balance of premium or the annual rent. The complaint was
c allowed with certain directions. In appeal, the National
Commission rescheduled the recovery of lease premium
instalments and granted certain reliefs to respondents in
regard to interest. Hence the present appeals.
Allowing the appeals filed by UT Chandigarh
D Administration and dismissing the appeals filed by the
..
lessees-complainant, the Court
HELD: 1.1 A 'com\>laint' is maintainable before a
consumer forum under the Consumer Protection Act,
E
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
F 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,
G for obtaining any relief provided by order under the Act.
[Para 1 OJ [555-F-G]
1.2 Where a public development authority having
invited applications for allotment of sites in a lay out to be
H formed or for houses to be constructed and delivered,
•
.I
UT CHANDIGARH ADMINISTRATION & ANR. V.
543
AMARJEET SINGH & ORS.
fails to deliver possession by forming the lay out of sites A
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. But where existing sites are put
up for sale or lease by public auction by the owner, and B
the sale/lease is confirmed in favour of the highest bidder,
the resultant cont

## Text

_Characters 0–39,773 of 73,606. This is a partial read: ask again with offset=39773 for what follows._

[2009] 4 S.C.R. 541
'\
U.T. CHANDIGARH ADMINISTRATION & ANR.
A
v.
AMARJEET SINGH & ORS.
Civil Appeal No. 1994 of 2006
MARCH 17, 2009
B
[R.V. RAVEENDRAN AND MARKANDEY KAT JU, JJ.]
•
Consumer Protection Act, 1986:
Auction for grant of lease of sites - Liability to pay lease
premium instalments and annual rent - If conditional upon c
UT Chandigarh providing basic amenities to sites leased -
Held: It is not conditional -
There is no obligation on
Chandigarh administration to provide amenities with reference.
to lease of sites by public auction - It cannot be said that
instalments could be rescheduled so as to begin after
D
amenities were provided and that interest would start to run
only when lessee takes possession - When instalments are
not paid on due dates, lessees become liable to pay penal
interest from due date to date of actual payment - Rate of
default interest in r. 12(3A) as on date of auction, would apply
- Hence, order of National Commission rescheduling recovery
E
of lease premium instalments and granting certain relief to
"·
lessee in regard to interest, set aside - Capital of Punjab
(Development & Regulation) Act, 1952 -
Chandigarh
Leasehold Sites & Building Rules, 1973.
s. 2 (b), (c), (d), (q) and (o)- Lease of sites by public auction
F
by owner -
Complaint by auction purchaser/(essee -
Maintainability of - Held: Not maintainable - Grievance by
purchaser/lessee will not give rise to consumer dispute- There
is no hiring or availing of services - Purchaser/lessee is not a
'consumer' - Owner is not a 'trader' or 'service provider'.
G
Words and Phrases:
'Amenity' - Meaning of - In the context of s. 2(b) of the
Capital of Punjab (Development and Regulation) Act, 1952.
541
H
542
SUPREME COURT REPORTS
(2009] 4 S.C.R.
A
Respondent-lessees secured leasehold interest in
T
sites belonging to UT Chandigarh in public auctions held
by it. It is alleged that the appellants did not provide any
amenities in regard to the site and as a result the
respondents suffered huge losses. Respondents filed a
B complaint before the Consumer forum that until the basic
amenities-approach road, sewerage, ground water, street
light, electricity, parking spacl:! were provided, the
appellants should not be legally entitled to claim the
•
balance of premium or the annual rent. The complaint was
c allowed with certain directions. In appeal, the National
Commission rescheduled the recovery of lease premium
instalments and granted certain reliefs to respondents in
regard to interest. Hence the present appeals.
Allowing the appeals filed by UT Chandigarh
D Administration and dismissing the appeals filed by the
..
lessees-complainant, the Court
HELD: 1.1 A 'com\>laint' is maintainable before a
consumer forum under the Consumer Protection Act,
E
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
F 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,
G for obtaining any relief provided by order under the Act.
[Para 1 OJ [555-F-G]
1.2 Where a public development authority having
invited applications for allotment of sites in a lay out to be
H formed or for houses to be constructed and delivered,
•
.I
UT CHANDIGARH ADMINISTRATION & ANR. V.
543
AMARJEET SINGH & ORS.
fails to deliver possession by forming the lay out of sites A
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. But where existing sites are put
up for sale or lease by public auction by the owner, and B
the sale/lease is confirmed in favour of the highest bidder,
the resultant contract relates to sale or lease of immovable
property. There is no hiring or availing of services by the
person bidding at the auction. Nor is the seller or lessor,
a trader who sells or distributes 'goods'. The sale price or c
lease premium paid by the successful bidder of a site, is
the consideration for the sale or lease, and not consideration for any service or for provision of any amenity
or for sale of any goods. [Para 12] [558-F-H; 559-A]
1.3 Where there is a public auction without assuring D
any specific or particular amenities, and the prospective
purchaser/lessee participates in the auction after having
an opportunity of examining the site, the bid in the auction
is made keeping in view the existing situation, position
and condition of the site. If all amenities are available, he E
would offer a higher amount. If there are no amenities, or
if the site suffers from any disadvantages, he would offer
" a lesser amount, or may not participate in the auction.
Once with open eyes, a person participates in an auction,
he cannot thereafter be heard to say that he would not F
pay the balance of the price/premium or the stipulated
interest on the delayed payment, or the ground rent, on
the ground that the site suffers from certain
disadvantages or on the ground that amenities are not
provided. With reference to a public auction of existing G
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 H
544
SUPREME COURT REPORTS
[2009] 4 S.C.R.
A
will not give rise to a complaint or consumer dispute and
the fora under the Act will n.ot have jurisdiction to entertain
or decide any complaint by the auction purchaser/lessee
against the owner holding the auction of sites. [Para 14]
[560-C-G]
B
c
D
E
F
G
H
Lucknow Development Authority v M.K. Gupta 1994 (1)
SCC 243; Ghaziabad Development Authority v Balbir Singh
2004 (5) sec 65 - relied on.
Municipal Corporation, Chandigarh & Ors. v Shanti Kun}
Investment (P) Ltd. and Ors. 2006 (4) SCC 109; Sector - 6,
Bahadurgarh Plot Holders Association v. State of Haryana
1996 (1) sec 485 - distinguished.
1.4 The term 'amenity' as defined in section 2(b) of
the Capital of Punjab (Development and Regulation) Act,
1952 includes roads, water-supply, street lighting,
drainage, sewerage, public building, horticulture,
landscaping and any other public utility service provided
at Chandigarh". The term 'amenity' is significantly not
used in section 3 which relates to transfer of land by sale
or lease by the government. Neither ss 6 and 7 nor any
other provision of the Development Act casts any
obligation on the Central Government to provide
amenities to plots sold/leased by public auction.
Therefore, the assumption that there is a statutory
obligation on the part of the Central Government to
provide amenities, because the word 'amenity' is defined
in the Act is erroneous and baseless. The word 'amenity'
is used in the context of two specific matters. The first is
that the transferee/occupier of a site should not use the
site or leave it in a condition that it will prejudicially affect
the amenities in any part of Chandigarh. The second is
that Central Government can levy fees/taxes in respect of
any site/building, on the transferee/occupier for the
purpose of providing, maintaining or continuing any
amenity at Chandigarh. Thus, definition of the 'amenity'
in the Development Act, does not in any manner cast any
•
U.T. CHANDIGARH ADMINISTRATION & ANR. V.
545
AMARJEET SINGH & ORS.
obligation on Chandigarh administration to provide A
amenities with reference to the auction of leasehold rights
relating to sites belonging to Central Government. [Para
16] [562-8-D; 563-C-F]
1.5 The National Commission proceeded on
erroneous and baseless assumptions that there is no 8
obligation to pay the instalments until the amenities were
provided and consequently the instalments could be
rescheduled so as to begin after the amenities were
provided and that interest would sta,rt to run· only when
the lessee takes possession. The National Commission C
held that as the auction sale was in December 1996 and
the appellant had however provided all the basic facilities
by 1999 and the matter had been pending thereafter
before the Consumer fora, the three annual instalments
would get postponed and commence only after its D
decision, that is from 1.5.2005, instead of t~e instalment
schedule specified by the appellants (which commenced
in 1997). [Paras 17 and 24] [567-C-D; 576-D]
Shanti Kunj Investments Pvt. Ltd. v. U. T Administration
Chandigarh AIR 2001 P&H 309; DLJ Builders (P) Ltd. v. E
Advisor to the Administrator Chandigarh Administration CWP
~ No. 13695 of 2001 dated 18. 2. 2002; Municipal Corporation,
Chandigarh v. Shantikunj Investments Pvt. Ltd. 2006 (4) SCC
109 - referred to.
1.6 The equated instalment includes interest only
F
upto the dates stipulated as due dates. When the
instalments are not paid on the due dates, the lessees
become liable to pay penal interest at 24% per annum from
the due date to date of actual payment (vide clause 4 of G
General Term & Conditions of Auction and clause 5 of
Letter of allotment and Rule 12(3A) of the Leasehold
Rules). [Para 19] [571-D-E]
1.7 Section 7 of the Act empowers the Central
Government to levy such fees and taxes as it may consider H
546
SUPREME COURT REPORTS
[2009] 4 S.C.R.
A
necessary (which shall be in addition to any fee or tax for
the time being leviable under any other law) in respect of
any site or building on the transferee or the occupier
thereof, for the purpose of providing, maintaining or
continuing any amenity at Chandigarh. This provision
B
clearly demonstrates that the providing amenities is not
linked to auction of plots on lease basis and the premium
paid is not for providing any amenity. The Central
Government is required to provide amenities by levying
~
fees and taxes in respect of sites/plots on the transferees/
c
occupiers thereof. Therefore, it is doubtful whether any
proportionate reduction in penal/default interest could be
made on the ground of non-provision of amenities. [Para
24] [576-E-H]
1.8 The submission that the rate of default interest
D
was only 12% per annum under Rule 12(3A) of the
Leasehold Rules as on the date of the auction and
therefore clause (4) of the General Terms & Conditions of
Sale and clause (5) of the letter of allotment, providing for
payment of default interest @ 24% per annum was illegal
E
and unauthorized was urged for the first time in this Court.
The rate of default interest mentioned in Rule 12(3A) as
on the date of auction, would alone apply. If Rule 12(3A)
was not amended increasing the rate of default interest
from 12% p.a. to 24% p.a. as on the date of auction, then
the rate of interest stipulated in Rule 12(3A) as it stood on
F
the date of auction will apply. The appellants could not
charge default interest at a rate higher than what was
provided in the said rule. If any higher rate has been
charged by way of default interest and. it is not corrected,
it is open to the lessees to seek relief in accordance with
G
law. [Para 25] [577-B-D]
Municipal Corporation, Chandigarh v. Shantikunj
Investments Pvt. Ltd. 2006 (4) SCC 109 - distinguished.
Sector - 6, Bahadurgarh Plot Holders Association v. State
H
of Haryana - 1996 (1) SCC 485; Secretary, Bhubaneswar
\.
_,
~·
U.T. CHANDIGARH ADMINISTRATION & ANR. V.
547
AMARJEET SINGH & ORS.
Development Authority v Susanta Kumar Mishra C.A.No. 605/ A
2009 decided on 30.1.2009 by Supreme Court - referred to.
Case Law Reference
1994 (1) sec 243
Relied on.
Para 11
1996 (1) sec 485
Distinguished.
Para 11, 20
2004 (5) sec 65
Relied on.
Para 11
2006 (4) sec 109
Distinguished.
Para11,23&24
AIR 2001 P&H 309 Referred to.
Para 18
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 1994
of 2006
B
c
From the Judgement and Order dated 21.02.2005 of the
Hon'ble National Consumer Disputes Redressal Commission, D
New Delhi in F.A. No. 499 of 2003.
And Civil Appeal No. 1995 of 2006,
CA No. 1633 of 2009@ SLP [CJ No.25250 of 2007;
CA No. 1634 of 2009@ SLP [CJ No.4518 of 2008,
E
CA No. 1635 of 2009@ SLP [CJ No.4519 of 2008,
CA No. 1636 of 2009 @ SLP [CJ No.4520 of 2008,
CA No. 1637 of 2009@ SLP [CJ No.4523 of 2008,
F
CA No. 1638 of 2009@ SLP [CJ No.4525 of 2008,
CA No. 1639 of 2009@ SLP [CJ No.6362 of 2008,
CA No. 1640 of 2009@ SLP [CJ No. 6363 of 2008,
G
CA No. 1641 of 2009 @ SLP [CJ No.6364 of 2008,
CA No. 1642 of 2009 @ SLP [CJ No.6365 of 2008,
CA No. 1643 of 2009@ SLP [CJ No.6366 of 2008,
H
548
SUPREME COURT REPORTS
(2009] 4 S.C.R.
A
CA No. 1644 of 2009@ SLP [CJ No.6367 of 2008,
CA No. 1645 of 2009 @ SLP [CJ No.6368 of 2008,
CA No. 1646 of 2009@ SLP [CJ No.6369 of 2008,
B
c
CA No. 1647 of 2009@ SLP [CJ No. 6372 of 2008,
CA No. 1648 of 2009 @ SLP [CJ No.6373 of 2008,
CA No. 1649 of 2009@ SLP [CJ No.6374 of 2008,
CA No. 1650 of 2009@ SLP [CJ No.6375 of 2008,
CA No. 1651 of 2009@ SLP [CJ No.6376 of 2008,
CA No. 1652 of 2009 @ SLP [CJ No.6377 of 2008,
CA No. 1653 of 2009 @ SLP [CJ No.6378 of 2008,
D
CA No. 1654 of 2009@ SLP [CJ No.6379 of 2008,
CA No. 1655 of 2009 @ SLP [CJ No.6380 of 2008,
E
CA No. 1656 of 2009@ SLP [CJ No.6381 of 2008,
CA No. 1657 of 2009 @ SLP [CJ No.6382 of 2008,
CA No. 1658 of 2009@ SLP [CJ No.6383 of 2008,
CA No. 1659 of 2009@ SLP [CJ No.6384 of 2008,
CA No. 1660 of 2009 @ SLP [CJ No.6385 of 2008,
F
CA No. 1661 of 2009 @ SLP [CJ No.15831 of 2008,
G
H
CA No. 1662 of 2009 @ SLP [CJ No.15859 of 2008.
WITH
CA NOS.1674-1686 OF 2009, [@ SLP (C) NOS. 3271
TO 3283 OF 2008]
Kamini Jaiswal, P.N. Puri. Jatinder Kumar Bhatia, K.P.
Dubey, for the Appellants.
P.S.Patwalia Senthil Jagadeesan, Himanshu Shekhar,
U.T. CHANDIGARH ADMINISTRATION & ANR. V.
549
AMARJEET SINGH & ORS.
Kailash Chand, K.G. Bhagat, Manju Bhagat, Ehraz Zarar, A
Mahohar Singh Bakshi, Vineet Bhagat, for the Respondent.
The Judgement of the Court was delivered by
R.V. RAVEENDRAN, J.
Leave granted in the special leave petitions. These appeals B ,
are filed by Union Territory of Chandigarh (for short 'UT
Chandigarh'). C.A. Nos.1994 of 2006 and 1995 of 2006 are
filed against a common order dated 21.2.2005 passed by the
National Consumer Disputes Redressal Commission ("National
Commission" for short). Other appeals are filed against the C
common order dated 21.2.2007 passed by the National
Commission following the earlier order dated 21.2.2005. By
these orders, the lease premium instalments have been
rescheduled and certain reliefs have been granted in regard to
interest, to the lessees -
respondents (who had secured D
leasehold interest in sites belonging to UT Chandigarh in public
auctions held by it).
FACTS OF THE CASE
2. As the facts are similar, we will refer to the facts of only E
one case (CA No.1994/2006 arising from FA No.499/2003 on
the file of the National Commission). 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 F
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 G
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 H
550
SUPREME COURT REPORTS
[2009] 4 S.C.R.
A
the preITTium 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;
B
c
D
E
F
G
H
(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 becoming due on the expiry of one
year from the date of auction.
(iv) If the instalments of the lease of premium or the ground
rent were not paid on the due dates, interest at the rate of 24%
per annum should be paid from the due date to date of payment.
(v) The successful bidder should complete the construction
of the building on the plot within three years from the date of
auction in accordance with the Punjab Capital (Development &
Regulation) Building Rules, 1952 ('Building Rules' for short)
(vi) The government would not be responsible for leveling
of uneven sites.
(vii) In the event of default, breach or non compliance of
any of the terms and conditions of lease, the lease was liable to
be cancelled and the site/building resumed and the amount paid
to government towards premium/rent forfeited either wholly or
in part.
(viii) The lessee was liable to pay all taxes and fees as
may be levied by the Chandigarh Administration in respect of
the site and the building to be constructed thereon.
3. Respondents 1 to 4 were the successful bidders in
regard to plot No.173 in Sector No.39C & D at the auction held
on 18.12.1996. The lease premium bid offered by them was
Rs.20,45,000. The acceptance of the bid cum confirmation of
the lease of the plot was communicated to respondents 1 to 4
by letter dated 19.5.1997 (for short 'letter of allotment') enclosing
U.T. CHANDIGARH ADMINISTRATION & ANR. V.
551
AMARJEET SINGH & ORS. [R.V. RAVEENDRAN, J.]
therewith a letter offering possession of the leased site. The A
said letter of allotment acknowledged the receipt of Rs.511,250
towards 25% of the premium and permitted the respondents to
pay the balance 75% of the premium with 10% interest thereon
in 3 equated instalments of Rs.6,16,736/- on 18.12.1997,
18.12.1998 and 18.12.1999. It also required the respondents B
to pay annual ground rent of Rs.51125/- during the first 33 years
of lease. The letter of allotment set out and reiterated the terms
and conditions of lease and required the respondents to enter
into a lease deed within six months and take possession of the
site before the lease deed is executed.
c
4. The respondents filed a complaint before the Consumer
Disputes Redressal Commission, Union Territory, Chandigarh
(for short 'UT Commission') under the Consumer Protection Act,
1986 ('Act' for short) in the year 1999. In the said complaint they
alleged that in addition to the initial payment of Rs.511250/- D
towards the lease premium, they had paid 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 E
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 F
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 G
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 H
A
B
c
D
552
SUPREME COURT REPORTS
[2009] 4 S.C.R.
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 the letter of allotment were not entitled to wriggle out of the
contract terms or refuse to pay the balance. It was also
contended that the respondents were liable to pay the 75%
balance premium in three annual instalments and in addition
pay interest@ 24% per annum on the delayed instalments. The
appellants submitted that they had not made any representation
to the public in general or the respondents in particular that the
plots auctioned were 'fully developed' plots or that the plots are
situated in fully developed areas; nor was payment of premium
or rent subject to Chandigarh Administration providing any 'basic
amenities'. Therefore, the respondents could not link the issue
of payment of instalments or ground rent with the issue of basic
amenities. It was also submitted neither the terms of lease nor
the provisions relating to auction of leasehold rights in the
Development Act and the Leasehold Rues, cast any obligation
E
upon the appellants to provide the basic amenities required by
the respondents and ensure that the site auctioned was situated
in a fully developed area; and that the auction was on "as is
where is" basis and the bidders were fully aware of the situation
and condition of the site for which they were bidding, as also
F
the terms and conditions subject to which the auction was held.
The appellants also contended that the complaint was not
maintainable.
6. The U.T. Commission allowed the complaint by the
respondents, alongwith other similar complaints, by a common
G
order dated 31.3.2003 with the following directions :
H
(i)
The date of auction for the purpose of payment of
price shall be deemed to be date on which plinth
level and all the basic amenities demanded in the
complaint cases are actually provided.
'
...
.;
)
U.T. CHANDIGARH ADMINISTRATION & ANR. V.
553
AMARJEET SINGH & ORS. [R.V. RAVEENDRAN, J.]
(ii)
An officer of the rank of Chief Engineer (or next rank) A
of UT Chandigarh shall certify that the plinth level as
well as other basic requirements/amenities were
provided. The date of such certificate shall be
considered to be the date of auction.
(iii) The instalments shall be rescheduled accordingly and 8
the remaining price of the plots shall be deposited
after rescheduling the instalments without any change
in the bid price offered.
(iv)
The lease rent shall be payable from the date of C
certificate of the Chief Engineer mentioned above.
(v)
Interest on the amount due by the lessee shall be
payable only from the date the aforesaid certificate
is issued.
D
(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 E
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 F
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.
G
(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 H
554
A
SUPREME COURT REPORTS
(2009] 4 S.C.R.
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.
B
However, the National Commission made it clear that:
(a)
No penalty shall be levied for delayed payment of
instalments or ground rent as the complaints were
pending with the State Commission which had
c
ultimately granted relief to the complainants;
(b)
In respect of the premium instalments payable on 1st
May, 2005, 2006 and 2007, complainants shall pay
interest@ 10% and in case of any default in payment
of instalments as above, it would be open to the
D
appellants to recover interest as per the rules.
8. The facts of the other appeals are also similar. Only the
plot numbers/dates/amounts vary. CA No.1995/2006 arises out
of FA No.500/2003 disposed by the said common order dated
E
21.2.2005. All other appeals arise from a common order dated
21.2.2007 of the National Commission which was passed in
terms of the earlier order dated 21.2.2005, the only change
being to alter the dates of rescheduled instalments as 1.5.2007,
1.5.2008 and 1.5.2009. The orders dated 21.2.2005 and
F
21.2.2007 of the National Commission are challenged in these
appeals.
GROUNDS OF CHALLENGE
9. The appellants have urged the following common
G
contentions in these appeals :
(i) When the auction of sites (for grant of a lease for 99
years) was in exercise of the power of the government (UT
Chandigarh Administration) under the provisions of the
Development Act ;, , accordance with the Leasehold Rules, it
H
involves neither sale of goods nor rendering of any service. The
...
'
U.T. CHANDIGARH ADMINISTRATION & ANR. V.
555
AMARJEET SINGH & ORS. [R.V. RAVEENDRAN, J.]
.c
act of leasing plots by auction by the appellants therefore did A
not result in the successful bidder becoming a 'consumer' or
the appellants becoming 'service providers'. In the absence of
hiring or availing of any service, the question of deficiency in
service or unfair or restrictive trade practice with reference to a
service, did not arise and the complaint under the Act was not B
maintainable.
(ii) There was no obligation on the part of the appellants,
either statutory or contractual, to provide the 'basic amenities'
demanded by the respondents with reference to the lease of
sites by public auction. The payment of the premium (which was C
permitted to be paid in instalments on the request of the
successful bidder) and the annual rent was not conditional upon
the UT Chandigarh providing any basic amenities. Payment of
the amounts due coufd not be postponed on the ground of
"
absence of amenities. Nor could payment of default interest be D
avoided, once there was default. Therefore, even assuming that
the complaint was maintainable, the National Commission 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
E
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' F
'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 G
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 H
556
SUPREME COURT REPORTS
[2009] 4 S.C.R.
~
,,.
A
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 matters enumerated in clause (c) of Section 2 of the
Act, the consumer forum will have no jurisdiction either to
entertain any complaint or grant any relief under the Act.
B
11. The respondents relied upon the decisions in Lucknow
Development Authority v. M.K. Gupta - 1994 (1) SCC 243,
Sector - 6, Bahadurgarh Plot Holders Association v. State of
..
Haryana - 1996 (1) SCC 485, Ghaziabad Development
c
Authority v. Balbir Singh - 2004 (5) SCC 65 and Municipal
Corporation, Chandigarh & Ors. v. Shanti Kunj Investment (P)
Ltd. and Ors. - 2006 (4) SCC 109, to contend that the complaints
were maintainable and relief sought could be granted. We may
straight away note that the decisions in Bahadurgarh and
Shantikunj will not be of any assistance to decide the issue of
D
maintainability, as those cases did not relates to complaints
under the Consumer Protection Act, but arose out of writ
petitions.
11.1 In Lucknow Development Authority v. M. K. Gupta
E
[1994 (1) SCC 243] this Court held that if the nature of duty or
function performed was a service as defined under the Act, then
the provider of the service, irrespective of whether it is a private
body or statutory or a public authority, would be amenable to
the provisions of the Act This Court held :-
F
"As pointed out earlier the entire purpose of widening the
definition (of 'service' under section 2(o) of the Consumer
Protection Act) is to include in it not only day to day buying
and selling activity undertaken by a common man but even
such activities which are otherwise not commercial in
G
nature yet they partake of a character in which some benefit
'
is conferred on the consumer. Construction of a house or
flat is for the benefit of person for whom it is constructed.
He may do it himself or hire services of a builder or
contractor. Tne l::itter being for consideration is service as
H
defined in the Act. Similarly when a statutory authority
..
U.T. CHANDIGARH ADMINISTRATION & ANR. V.
557
AMARJEET SINGH & ORS. [R.V. RAVEENDRAN, J.]
develops land or allots a site or constructs a house for the A
benefit of common man it is as much service as by a
builder or contractor. The one is contractual service and
other statutory service. If the service is defective or it is not
what was represented then it would be unfair trade practice
as defined in the Act. Any defect in construction activity B
would be denial of comfort and service to a consumer.
When possession of property is not delivered within
stipulated period the delay so caused is denial of service.
Such disputes or claims are not in respect of immovable
property as argued but deficiency in rendering of service c
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. xxxxxTherefore if
such authority undertakes to construct building or allot
houses or building sites to citizens of the State either as 0
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 E
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 F,
free of charge or under a constraint of personal service is
included in it."
(emphasis supplied).
•
>-
11.2 In Ghaziabad Development Authority v. Balbir Singh G
[2004(5) SCC 65] this Court held :-
''Thus the law is that the Consumer Protection Act, 1986
has a wide reach and the Commission has jurisdiction
even in cases of service rendered by statutory and public H
558
SUPREME COURT REPORTS
[2009) 4 S.C.R
A
authorities. Such authorities become liable to compensate
t '
for misfeasance in public office i.e. an act which is
oppressive or capricious or arbitrary or negligent provided
loss or injury is suffered by a citizen. The Commission/
Forum must determine that such sufferance is due to mala
B
fide or capricious or oppressive act. It can then determine
the amount for which the authority is liable to compensate
the consumer for his sufferance due to misfeasance in
public office by the officers. Such compensation is for
.....
vindicating the strength of the law. It acts as a check on
•
c
arbitrary and capricious exercise of power. It helps in curing
social evil. It will hopefully result in improving the work
culture and in changing the outlook of the officer/public
servant. No authority can arrogate to itself the power to
act in a manner which is arbitrary. Matters which require
D
immediate attention should not be allowed to linger on.
The consumer must not be made to run from pillar to post.
Where there has been capricious or arbitrary or negligent
exercise or non-exercise of power by an officer of the
authority, the Commission/Forum has a statutory obligation
E
to award compensation."
~
12. The decisions in Lucknow Development Authority and
'
Ghaziabad Develoopment Authority make it clear that where
a public development authority having invited applications for
.A
allotment of sites in a lay out to be formed or for houses to be
F
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. But where existing
G
sites are put up for sale or lease by public auction by the owner,
and the sale/lease is confirmed in favour of the highest bidder,
ii
the resultant contract relates to sale or lease of immovable
property. There is no hiring or availing of services by the person
bidding at the auction. Nor is the seller or lessor, a trader who
H
sells or distributes 'goods'. The sale price or lease premium
J
U.T. CHANDIGARH ADMINISTRATION & ANR. V.
559
AMARJEET SINGH & ORS. [R.V. RAVEENDRAN, J.]
paid by the successful bidder of a site, is the consideration for A
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 B
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 C
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 D
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 should be allotted
to him. The development authority fixes the uniform price with E
reference to the size of plots. In most development schemes,
the applications are invited and allotments are made long before
the actual development of the lay out or formation of sites. Further
the development scheme casts an obligation on the
development authority to provide specified amenities. F
Alternatively the developer represents that he would provide
certain amenities, in the Brochure or advertisement. In a public
auction of sites, the position is completely different. A person
interested can inspect the sites offered and choose the site
which he wants to acquire and participate in the auction only in G
regard to such site. Before bidding in the auction, he knows or
is in a position to ascertain, the condition and situation of the
site. He knows about the existence or lack of amenities. The
auction is on 'as is where is basis'. With such knowledge, he
participates in the auction and offers a particular bid. There is H
560
SUPREME COURT REPORTS
(2009] 4 S.C.R.
A
no compulsion that he should offer a particular price. When the
\
sites auctioned are existing sites, without any assurance/
representation relating to amenities, there is no question of
deficiency of service or denial of service. Where the bidder has
a choice and option in regard to the site and price and when
8
there is no assurance of any facility or amenity, the question of
the owner of the site becoming a service provider, does not
arise even by applying the tests laid down in Lucknow
"
Development Authority or Balbir Singh.
14. Where there is a public auction without assuring any
c
specific or particular amenities, and the prospective purchaser/
lessee participates in the auction after having an opportunity of
examining the site, the bid in the auction is made keeping in
view the existing situation, position and condition of the site. If
all amenities are available, he would offer a higher amount. If
D
there are no amenities, or if the site suffers from any
disadvantages, he would offer a lesser amount, or may not
participate in the auction. Once with open eyes, a person
participates in an auction, he cannot thereafter be heard to say
that he would not pay the balance of the price/premium or the
E
stipulated interest on the delayed payment, or the ground rent,
on the ground that the site suffers from certain disadvantages
or on the ground that amenities are not provided. 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
F
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
G
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
H
assumption that there was an obligation on the part of the
U.T. CHANDIGARH ADMINISTRATION & ANR. V.
561
AMARJEET SINGH & ORS. [R.V. RAVEENDRAN, J.]
appellants to provide amenities in the nature of approach road, A
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 B
auction, nor the letter of allotment contained any assurance
regarding provisions of any such amenities with reference to
the sites put up for auction. To get over the absence of such
term or assurance, the respondents relied upon the definitions
of the words 'site' and 'amenity' in the Development Act and the c
provisions of the Leasehold Rules to contend that there was a
statutory obligation to provide the amenities and failure to
provide such amenities gave a cause of action to approach the
Consumer Forum with a complaint against the appellants and
also withhold payment of the premium instalments and ground D
rent. On the other hand, the appellants contend that they had no
obligation, either contractual or statutory, to provide amenities
of any nature, with reference to the auction of the leasehold rights
of sites and the lack of amenities or alleged non-provision of
amenities cannot be a ground for withholding the premium and
re~.
E
16.