DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

1.                 Prem Sood s/o Sh. Gurparsad Sood r/o Village Manauli, Tehsil & Distt. SAS Nagar, Mohali.

2.                 Om Parkash Chhabra s/o Sh. Hovna Ram r/o village Khera Gajju, Tehsil Rajpura, Distt. Patiala.

                                      ---Complainants.

Versus

1.                 PNB Housing Finance Ltd., SCO No.120-121, Sector 8-C, Chandigarh through its Branch Manager/Branch In charge.

2.                 PNB Housing Finance Ltd., Antriksh Bhawan, 9^th Floor, 22, Kasturba Gandhi Marg, New Delhi, through its Managing Director.

---Opposite Parties.

BEFORE:  SHRI LAKSHMAN SHARMA                 PRESIDENT

                   SMT. MADHU MUTNEJA                       MEMBER

                   SHRI JASWINDER SINGH SIDHU       MEMBER

Argued by:  Sh. Rajesh Verma, Counsel for the complainants

                        Sh. J.S. Bagga, Counsel for the OPs.

PER LAKSHMAN SHARMA, PRESIDENT

1.                           Sh. Prem Sood and another have filed this complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act only) praying for the following reliefs :-

“i)        Rs.8,00,000/- as sale consideration paid to the OPs for purchase of the property.

ii)                 Rs.1,00,000/- spent on stamp duty, registration and other charges.

iii)              Rs.2,50,000/- as loss suffered due to further sale of this property after acquiring the title of property.

iv)               Rs.2,29,500/- as interest as calculated upto 19.6.2011 on an amount of Rs.9,00,000/- and future interest.

v)                  Rs.43,625/- as interest on an amount of Rs.2,50,000/- @ 18% upto 19.6.2011 and future interest.

vi)               Rs.2,00,000/- as compensation for causing mental and physical harassment and towards litigation expenses.”

2.                           In brief, the case of the complainants is that on 13.5.2009, opposite party No.1 issued a public notice in the newspaper for sale of one free hold single storey house measuring 200 sq. yards for Rs.9,00,000/-.  The said house was situated in Dashmesh Nagar, Ward No.12, Sector 15, NAC Kharar. The property in question belonged to Ranjit Singh and Mann Singh and was mortgaged with opposite party No.1. 

                   According to the complainants, they gave their bid jointly.  However, one day when they alongwith their children went to the property, one person, namely Sh. Sukhpal Singh, met them and claimed that the property belonged to him.  The complainants reported the matter to the opposite parties upon which the mistake was admitted.  The opposite parties told the complainant that the actual property, which belonged to Ranjit Singh, is some other property and the same is a vacant plot. It has been averred by the complainants that the opposite parties showed them another property which was also mortgaged with them. 

                   According to the complainants, they liked the property and upon their request the opposite parties also agreed to reduce its price to Rs.8,00,000/- as it was a plot.  Subsequently the opposite parties again issued a public notice dated 26.11.2009.  The complainants made payment of Rs.8,00,000/- through demand draft on 30.11.2009.  Thereafter opposite party No.1 executed a sale deed in favour of the complainants on 19.1.2010 and the complainants were further told that the title of the property is clear and undisputed. 

                   According to the complainants, they decided to sell the property in question in order to purchase two independent plots/houses.  Accordingly, one Jarnail Singh agreed to purchase the same and an agreement to sell was executed and a sum of Rs.2,50,000/- was received as earnest money.  The last date for completion of deal was fixed as 22.3.2010.

                   However, on 15^th March, Jarnail Singh came to the complainants and told that they have cheated him as the property in question belonged to one Kanta Rani.  The complainants contacted opposite party No.1 but it did not bother.  Due to this the complainants had to pay double the amount of earnest money i.e. Rs.5,00,000/- to the aforesaid Sh. Jarnail Singh.  According to the complainants, the opposite parties are neither refunding the sale consideration received from them and other expenses incurred nor they are delivering the undisputed and unencumbered possession, which amounts to deficiency in service and unfair trade practice on their part.

                   In these circumstances the present complaint has been filed seeking the reliefs mentioned above.

3.                           In their written statement the opposite parties admitted that inadvertently it was published in the publication dated 13.5.2009 that the property is a single storey house.  However, it has been pleaded that the mistake was rectified in subsequent publication upon actual verification of the site.  It has been pleaded that the complainants liked the property and purchased the same.  It has been averred that the reduction of price from Rs.9.00 lacs to Rs.8.00 lacs was their internal decision keeping in view the prevailing market price and the same was not done on the request of the complainants.

                   According to the opposite parties, the property in question was sold to the complainants under SARFAESI Act in a legal and lawful way.  It has been averred that a valid sale deed was executed in favour of the complainants, mutation was also sanctioned and even the physical possession of the property was also delivered to them.  It has been denied that Kanta Rani is the owner of the property in question. It has been pleaded that the property in question was mortgaged with them since 2003 and any subsequent sale in favour of Kanta Rani is illegal, null and void and has no legal sanctity.  It has further been pleaded that only the opposite parties could have sold the property in question or Ranjit Singh, had he cleared the mortgage with the opposite parties.  It has been averred that the money cannot be refunded to the complainants as a valid title was passed to them. It has further been averred that the complainants are guilty of losing the possession of the property in favour of a third person.  The remaining averments have been denied being wrong.

                   Pleading that there is no deficiency in service on their part prayer for dismissal of the complaint has been made.

4.                           We have heard the learned counsel for the parties and have gone through the documents on record.

5.                           At the outset, it was vehemently argued by the ld. Counsel for the opposite parties that the complainants are not consumers qua them.  Therefore, the present complaint is not maintainable and deserves dismissal.  According to the ld. Counsel, the opposite parties do not deal in the business of sale or purchase of properties.  The land sold to the complainants was mortgaged with the opposite parties by one Ranjit Singh who had taken loan from them.  Shri Ranjit Singh failed to repay the loan.  In these circumstances, in order to recover the loan amount paid to Shri Ranjit Singh, the said property was sold in auction in accordance with the provisions of SARFAESI Act.  Furthermore, according to the opposite parties, the property was shown to the complainants before it was auctioned and the said property was sold on “as is where is basis”.  Thus, according to the ld. Counsel, the complainants had opportunity to find about the ownership of the property from the relevant sources and to participate in the bid thereafter.  In support of his contentions, the ld. Counsel has cited U.T. Chandigarh Administration & Anr. Vs. Amarjeet Singh & Ors.-II (2009) CPJ 1 (SC) wherein the Hon'ble Supreme Court held as under :-

12.       The decisions in Lucknow Development Authority and Ghaziabad Development Authority make it clear that 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. But where existing 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, 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 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.

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 should be allotted to him. The development authority fixes the uniform price with 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. 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 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 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 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 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 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 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 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.

6.                           On the other hand, the ld. Counsel for the complainants has cited the case Rajit Khod Vs. Haryana Urban Development Authority-IV (2011) CPJ 669 (NC).  To our mind, the ratio of this case is not applicable to the facts and circumstances of the present case.  In the case cited, in the allotment letter it was mentioned that the site would be offered on completion of development works in the area.  So, the complainant filed a complaint before the Forum alleging that the site has not been offered after completion of development works and there is deficiency in service.  In such circumstances, it was held by the Hon'ble National Commission that the ratio of the case U.T. Chandigarh Administration Vs. Amarjeet Singh (supra) is not applicable in that case and it was held that the complaint is maintainable. However, it is not so in the present case. 

7.                           It is a simplicitor case of the complainants that the land, which was sold to them in an open auction, does not belong to the person who mortgaged it with the opposite parties and, in fact, the same belongs to some other person.  If it is so, the complainants can get their grievance redressed from a competent court by filing a civil suit.  By purchasing the property in an open auction, the complainants do not become consumers qua the opposite parties within the meaning and scope of the Act and the well settled law. 

8.                           In view of the above discussion, we are of the opinion that as the complainants are not consumers the present complaint is not maintainable and the same cannot be entertained.  Hence the present complaint is dismissed leaving the parties to bear their own costs.  The complainants are, however, free to avail their remedy before the competent court, if so advised.

9.                           Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

5.2.2013.

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

Sd/-

 (MADHU MUTNEJA)

MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER

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