Consumer law
giriprazath
(Querist) 07 April 2013
This query is : Resolved
whether an auction purchaser of a property under a SARFAESI ACT is coming within the purview of consumer? is there any authority?
ajay sethi
(Expert) 07 April 2013
for citations visit indian kanoon .com
R.K Nanda
(Expert) 07 April 2013
search google.
M V Gupta
(Expert) 07 April 2013
An auction purchaser cannot be regarded as consumer within the meaning of the word as defined in Section 2(d) of the CP act. The auction under the SARFAESI Act is held by the Bank in exercise of the powers vested in it for realization of the loan amount. It is in the same position as that of vendor of immovable property and does not render any service or deal in any goods. (Immovable property is not "goods" as mentioned in the section.)As for authority u may search the websites of India Kanoon or judgements.
Raj Kumar Makkad
(Expert) 07 April 2013
No. He cannot be a consumer as per definition of CP Act.
Devajyoti Barman
(Expert) 07 April 2013
He is not a consumer.
For citation please help yourself.
Guest
(Expert) 08 April 2013
As a quick search i could find one judgment. Another one is of Union Bank of India 2009 or 2010 where truck was sold to auction purchaser and proper documentation was not done. It was also held as deficiency in service by SC. Hence mere being auction purchaser does not oust one from consumer fora.
REVISION PETITION NO. 729 OF 2011
(From the order dated 26.11.2010 in Appeal no. 1146 of 2002 of the Haryana State Consumer Disputes RedressalCommission, Panchkula)
Rajil Khod
Son of Hait Ram Khod
Resident of 143, C Block Petitioner
Near New Anaj Mandi
Sirsa
versus
Haryana Urban Development Authority
Through Estate Officer, Respondent
Hisar
BEFORE:
HON’BLE MR. JUSTICE R. C. JAIN PRESIDING MEMBER
HON’BLE MR. ANUPAM DASGUPTA MEMBER
For the Petitioner Mr. S. S. Jangra, Advocate
For the Respondent Mr. B. S. Sharma, Advocate
for Mr. R. S. Badhran, Advocate
Pronounced on 18th November, 2011
O R D E R
ANUPAM DASGUPTA
This revision petition is directed against the order dated 26.11.2010 of the Haryana State Consumer DisputesRedressal Commission, Panchkula (in short, ‘the State Commission’) in First Appeal no. 1146 of 2002. By this order, the State Commission allowed the appeal filed by the Haryana Urban Development Authority (in short, ‘the HUDA’) against the order dated 25.02.2002 of the District Consumer Disputes Redressal Forum, Hisar (in short, ‘the District Forum’) in complaint case no.611 of 2001 filed by the petitioner herein.
2 (i) The petitioner was the complainant before the District Forum. He participated in an auction held by the respondent and, being the highest bidder for the sum of Rs.3,30,500/-, was allotted a commercial plot of land (DSS 69) measuring 78.78 sq. mtr in the Old Court Area, Hisar by allotment letter dated 31.07.1990. He paid all the instalments for the price of the plot of land by 02.01.1996. However, the respondent failed to deliver/offer possession of the plot after completing the development works in the area in accordance with clause 6 of the allotment letter. The petitioner was thus constrained to file a consumer complaint (no. 930 of 1996) against the respondent before the District Forum alleging deficiency in service on the part of the respondent for failing to offer possession of the plot of land despite repeated requests over nearly six years since the issue of the letter of allotment.
(ii) By its order dated 04.08.1998, the District Forum allowed the complaint holding that the complainant/petitioner had purchased the plot of land in question to earn his livelihood and the respondent could not keep the development works pending at its sweet will. The District Forum, therefore, awarded interest @ 18% per annum on the entire auction price of the plot from the dates of deposit of the amounts till the date of offer of possession of the plot.
(iii) The respondent HUDA went up in appeal before the State Commission which was disposed of by the State Commission by its order dated 25.11.1998 upholding the substantive part of the order dated 04.08.1998 of the District Forum but reducing the rate of interest to 15% per annum on the amounts deposited after expiry of two years from the date of the initial deposit. The respondent HUDA deposited Rs.1,94,233/- on 30.03.2006 in compliance of the aforesaid order of the State Commission and the amount was then disbursed to the petitioner/complainant.
(iv) However, on 26.07.2001, the respondent issued a notice directing the petitioner to show cause as to why the plot of land should not be resumed because the petitioner had failed to raise construction on it within the stipulated time. This forced the petitioner to file a second complaint before the District Forum seeking quashing of the show causenotice dated 26.07.2001. By its order dated 25.02.2002, the District Forum allowed the complaint, quashed the show cause notice dated 26.07.2001 and also awarded interest @ 15% per annum from 07.10.1997 on the entire deposited amount till the date of fresh offer of physical possession of the plot by the respondent after carrying out the requisite development works in the area. In addition, the District Forum awarded to the petitioner Rs.3,000/- as compensation for harassment and mental agony suffered by him and cost of Rs.1100/-. While allowing the complaint, the District Forum also observed, on the basis of the report of the Local Commissioner that there were bushes and scrub trees in and around the plots; the ground had not been levelled and there was no metalled or unmetalled road leading to the plot at that point of time.
(iv) The respondent HUDA preferred an appeal to the State Commission against this order dated 25.02.2002 of the District Forum. It is this appeal that was allowed by the State Commission by its impugned order dated 26.11.2010, relying solely on the ratio of the judgment of the Supreme Court in the case of U.T. Chandigarh Administration vsAmarjeet Singh and Others [2009 (4) Supreme Court Cases 660].
3. We have heard Mr. S. S. Jangra and Mr. B. S. Sharma on behalf of the petitioner/complainant and respondent HUDA respectively.
4 (i) In this context, we may observe that this Commission has recently dealt at length with the applicability of the ratio of the Apex Court’s decision in the case of U. T. Chandigarh Administration vs Amarjeet Singh and Ors (supra) to allotment of plot of land by the HUDA for commercial purpose through open auction. In the case of HUDA vs M/sSuneja and Sons [IV (2011) CPJ 1 (NC)] decided on 18.08.2011, it was inter alia argued on behalf of the HUDA that the matter could not be adjudicated at all by a Consumer Forum in view of the fact that the plot of land in question had been purchased in an open auction by the HUDA and such a transaction was ab initio outside the purview of the Consumer Protection Act, 1986 (in short, ‘the Act’) in the light of the Apex Court’s decision in U.T. Chandigarh Administration case.
(ii) Dealing with this point, this Commission first referred to the relevant paragraphs of the Apex Court’s judgment in the U.T. Chandigarh Administration case:
“18. The decision in LDA and GDA make in clear that where a public development authority having invited applications for allotment of sites in a layout to be formed or for houses to be constructed and delivered, fails to deliver possession by forming the layout 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 provisions of any amenity or for sale of any goods.
20. 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.
21. 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 to 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”.
(iii) The relevant clauses of the allotment letter, including clause 6 in the Suneja case (supra) were also noticed:
“5. The balance amount of Rs.16, 52,325/- of the above price of the plot/building can be paid in lump-sum without interest within 60 days from the date of issue of allotment letter or in 8 half-yearly installments. The first installment will fall due after the expiry of six months of the date of issue of this letter. Each installment would be recoverable together with interest on the balance price at 10% interest on the remaining amount. The interest shall, however, accrue from the date of offer of possession.
6. The possession of the site will be offered to you on completion of the development works in the area. In the case of building or undeveloped land, the possession shall, however, be delivered within 90 days from the date of this letter.
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8. In case the installment is not paid by the 10th of the month following the month in which it falls due, the Estate Officer shall proceed to take action for imposition of penalty and resumption of plot in accordance with the provisions of section 17 of the Act.
9. In the event of breach of any other condition of transfer, the Estate Officer may resume the land in accordance with the provisions of section 17 of the Act.
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[Emphasis supplied]
(iv) On this basis, this Commission held:
“………………………..In a situation like this, the auction purchaser of an existing site/plot/house will certainly be a “consumer” of, in accord with the provisions of section 2(1)(d)(ii) of the Act, the promised developmental “service” of the Authority in question, from the date of the letter of allotment till such time the promised service/s is/are delivered to the satisfaction of the purchaser, in accordance with the service provider’s, i.e., the Authority’s commitment in this behalf. The ruling of the Apex Court in the UT Chandigarh case does not, in my respectful view, cater for a situation where an auction purchaser buys an existing plot of land, not on “as is where is” basis but with an explicit commitment on the part of the original owner/auctioning entity to offer possession after completion of development works in the area”.
(v) In the Suneja case, this Commission further observed that the Apex Court itself did not find it fit to disentitle an auction purchaser to his simultaneous identity as a “consumer” under the Act in two cases decided in quick succession after the U.T. Chandigarh Administration case, viz., the cases of Haryana Urban Development Authority and Another vSatish Hans [(2009) 7 SCC 282] and Madan Kumar Singh vs District Magistrate, Sultanpur [IV (2009) CPJ 3 (SC)].
5. It need not be emphasised that in this case too, clause 6 of the allotment letter is identically worded as that in the Suneja case referred to above. Therefore, by the same logic, the status of the petitioner as a “consumer” under the Act and consequently, the jurisdiction of the Consumer Fora to adjudicate on the dispute cannot be ousted by mechanical application of the ratio of the Apex Court’s decision in the U T Chandigarh Administration case on the ground that the plot of land in question was sold by the respondent HUDA in an open auction, unmindful of the provisions of clauses of the letter of allotment, particularly clause 6. Further, the fact of deficiency in service in terms of failure of the respondent HUDA to carry out the assured development works in the area is amply established by evidence led before the District Forum in not one but two complaint proceedings, a point conceded by Mr. Sharma, learned counsel for the respondent.
6. In view of the foregoing discussion, the revision petition is allowed and the impugned order of the State Commission is set aside. However, we are not inclined to uphold in toto the direction of the District Forum to pay both interest and compensation for harassment to the petitioner. In our view, the interests of justice and equity would both be well served in this case if the respondent is directed to pay to the petitioner an overall compensation of Rs. one lakh. The order dated 25.02.2002 of the District Forum is modified accordingly The respondent HUDA is directed to comply with the direction so modified within four weeks from the date of this order. The parties are left to bear their own costs in these proceedings.
Sd/-
…………………………………..
[R. C. Jain, J]
Sd/-
………………………………..
[Anupam Dasgupta]
M V Gupta
(Expert) 09 April 2013
The judgement sited by Shri Khandeksr clearly holds that where an auction is held for sale of existing plot of land or house, the owner holding the auction is not service provider or trader who sells or distributes goods and the auction purchaser is not a consumer within the meaning of the Act. It is also held that the money (premium) paid by the auction bidder in such cases is not consideration for any service or provision of amenity or sale of any goods. As such the Bank which is bringing an attached property for sale is not a service provider or seller of goods as observed by me in my reply supra and the auction purchaser is not a consumer within the meaning of Section 2 of the CP Act.
