Section 7 of the Punjab Agricultural Produce Markets Act, 1961- Consumer Disputes - Agricultural Market yards - allotment of site on price - letters issued for non-payment of 75% amount and interest and penal interest - Challenged in District forum due to deficiency of amenities not able to do agriculture business in the allotted sites - Advocate commissioner appointed reports comes infavour of complainant- forum directed to pay the balance amount and direct the board not levy charge penalty or interest on the same. and directed to develop the area with in two months - State and National consumer forum upheld the same and Apex court too confirm the same =
On non-payment of the installments, the appellant called upon the
respondents to make the balance payments, being 75% of the cost with
interest and penalty charges as prescribed in the said allotment letter.
The respondents did not pay the same and filed a complaint before the
District Forum alleging deficiency of services, failure to notify the
Adampur Mandi as Market Area and failure to develop and provide basic
amenities in the said locality. The appellant opposed the complaint on
the ground that the respondents failed to make the payments of the
instalments and further that one of the complainants was not dealing
with the sale and purchase of agricultural produce by himself and instead
had sublet the shop to someone else.=
The
District Forum after perusing the report dated April 25, 2000 filed by
the Local Commissioner – Mr. Balhara, Advocate -- held that it is
admitted by both the parties that the Additional Mandi has no boundary
walls and gates and that there has been no notification by the appellant-
Board, further no auction has been made by the respondents and the
debris are lying around the shops. In these circumstances, the District
Forum by order dated September 20, 2001 held that it is admitted that due
to the omission of the appellant, no business could be done in the Mandi
and the boundary walls which are essential for the business, were not
provided. It is further held that the notification dated October 31, 1980
has no manner of application since the land was transferred to the
appellant in 1986 and the shops were auctioned in 1981. The District
Forum further held that due to the omission of the appellant, the
complainants/respondents herein were deprived of doing the grain business
for which the plots were purchased and in the absence of the notification
of the area as a sub-yard, the District Forum held that there was a grave
deficiency of service. The Forum awarded the respondents interest at 12%
per annum on the entire deposited amount after two years from the date of
issuance of allotment letters to the respondents till the development and
notification of the area in question is not done. The respondents were
directed to deposit the remaining balance amount and the appellant-Board
was directed not to levy any charge, penalty or interest on the same.
However, the Forum refused to allow the compensation as prayed by the
respondents and directed the appellants to develop the area within a
month. =
In Haryana State Agricultural Marketing Board v. Raj Pal (supra), the Court
upheld the principles as laid down in Shantikunj Case (supra) and Amarjeet
Singh Case (supra) and held that allottees cannot postpone the payment of
instalments on the grounds that some of the amenities were not provided and
the Court setting aside the penal and compound interest levied by the Board
and in consonance with the Allotment Rules of 1997, levied only simple
interest.
8. In the present case, the inaction on the part of the appellant in
providing the requisite facilities for more than a decade clearly
establishes deficiency of services as the respondents were prevented from
carrying out the grain business.
However, the respondents were also
incorrect in refusing to pay the instalments and violating the terms of
the instalment letter.
Thus, considering the surrounding circumstances
wherein the appellant has been unable to develop the area for more than
two decades and the resultant loss suffered by the respondents, we are of
the opinion that in the present situation, there is a need for
proportionate relief as the levy of penal interest and other charges on
the respondents will be grossly unfair.
9. In these circumstances, we do not find that any grounds have been made
out by the appellant to interfere with the order passed by the National
Commission. We have minutely examined the order passed by the District
Forum as well as the State Commission, and we have noticed that adequate
relief has been granted even to the respondents/complainants by awarding
interest @ 12 per cent per annum on the entire deposited amounts. Hence,
we do not find any merit in the appeal and the same is accordingly
dismissed.
2014 (March. Part ) judis.nic.in/supremecourt/filename=41340
GYAN SUDHA MISRA, PINAKI CHANDRA GHOSE
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3122 OF 2006
Haryana State Agricultural Marketing Board … Appellant
vs.
Bishamber Dayal Goyal and Ors. … Respondents
J U D G M E N T
Pinaki Chandra Ghose, J.
1. The present appeal has been filed assailing the order dated April 13,
2005 passed by the National Consumer Disputes Redressal Commission
(hereinafter referred to as “the National Commission”) in Revision
Petition Nos. 534-537 of 2005, affirming the order dated November 10,
2004 passed by the State Consumer Disputes Redressal Commission,
Chandigarh (hereinafter referred to as “the State Commission”), which
further confirmed the order dated September 20, 2001 passed by the
District Forum.
2. The facts of the case briefly are as follows :
a) By a notification dated November 16, 1971, the Haryana State Government
under Section 7 of the Punjab Agricultural Produce Markets Act, 1961
(hereinafter referred to as ‘the said Act’), notified the area of New
Grain Mandi, Adampur as Market Area. Subsequently, in the year 1974, the
areas/limits were further extended by five kilometers. In 1980, the State
Government notified a sub-market yard of New Grain Mandi, Adampur. The
Colonization Department of the State by a letter dated January 24, 1986,
transferred the said area to the Haryana State Agricultural Marketing
Board, the appellant herein.
b) The respondents herein were allotted plots by the appellant, being plot
Nos. 17, 7, 16 and 14 upon depositing the 25% of the price of the said
plots. The method of payment and the consequences for non-payment of any
instalment would appear from the allotment letter dated July 25, 1991.
Admittedly, the respondents did not pay the instalments in terms of the
allotment letters. The grounds mentioned by the respondents for non-
payment of such instalments were the failure on the part of the appellant
to provide basic amenities such as sewerage, electricity, roads etc. at
the said Adampur Mandi Area.
c) On non-payment of the instalments, the appellant called upon the
respondents to make the balance payments, being 75% of the cost with
interest and penalty charges as prescribed in the said allotment letter.
The respondents did not pay the same and filed a complaint before the
District Forum alleging deficiency of services, failure to notify the
Adampur Mandi as Market Area and failure to develop and provide basic
amenities in the said locality. The appellant opposed the complaint on
the ground that the respondents failed to make the payments of the
instalments and further that one of the complainants was not dealing
with the sale and purchase of agricultural produce by himself and instead
had sublet the shop to someone else.
d) The District Forum appointed a Senior Member of the Forum as the Local
Commissioner to inspect the said area and to file a report. The Local
Commissioner filed a report stating that the area was developed with
civic amenities and platforms were constructed in front of the shops.
However, it is admitted that the complainant is not in a position to run
the business in the market area as the same has not been notified by a
notification and/or order declaring it as a sub-yard for the purpose of
running the business. The District Forum held by order dated March 4,
1998 that the notification dated October 31, 1980 is not applicable since
the land was auctioned in 1991 and further, the same was not in the
ownership of the appellant and no business was transacted by the
complainant at the Adampur Mandi. The District Forum held that since no
notification was issued declaring the said area as sub-yard, it amounts
to deficiency of service and the appellant was directed to withdraw the
demand notice and further directed not to charge any interest on the
instalments. The appellant filed first appeal before the State
Commission, being First Appeal No.362 of 1998. The State Commissioner by
order dated March 3, 1998 remanded the matter to the District Forum
holding that the appointment of Local Commissioner, Shri Arya, being a
member of the District Forum vitiated the proceedings.
e) Thereafter, the District Forum took up the matter and appointed an
Advocate - Mr. G.L. Balhara - as the Local Commissioner, to make an
inspection and to file a report. The appellant herein on April 20, 2000,
once again issued demand notices to the respondents demanding the
payments. The main contention of the respondents being the complainants
was that although the area was not notified by the appellant-Board as a
market area, they were unable to conduct any grain business in the shops
for which they had purchased the said plots; and further alleged that no
basic amenities, i.e., sewerage, roads, parao, electricity etc. had been
provided by the Board, and that there were no boundary walls and gates of
the market area which were a necessity in such Mandi; furthermore, there
were heaps of debris lying around the shops. In these circumstances, the
plots allotted were redundant.
f) The appellants contended that the complainants are not consumers and
there is no deficiency of service. The respondents failed to construct
the booths in two years’ time even after getting the licences.
Furthermore, the respondents are not dealing with the agricultural
produce instead they have sublet the plots in question to other persons.
According to the appellants, the amenities of sewerage, water supply and
electricity were provided and construction of a platform was also done by
them. An Additional Mandi was established, according to the appellant, by
the Colonization Department and subsequently transferred to them in 1986.
The Colonization Department, in 1980, duly notified the same. The
District Forum after perusing the report dated April 25, 2000 filed by
the Local Commissioner – Mr. Balhara, Advocate -- held that it is
admitted by both the parties that the Additional Mandi has no boundary
walls and gates and that there has been no notification by the appellant-
Board, further no auction has been made by the respondents and the
debris are lying around the shops. In these circumstances, the District
Forum by order dated September 20, 2001 held that it is admitted that due
to the omission of the appellant, no business could be done in the Mandi
and the boundary walls which are essential for the business, were not
provided. It is further held that the notification dated October 31, 1980
has no manner of application since the land was transferred to the
appellant in 1986 and the shops were auctioned in 1981. The District
Forum further held that due to the omission of the appellant, the
complainants/respondents herein were deprived of doing the grain business
for which the plots were purchased and in the absence of the notification
of the area as a sub-yard, the District Forum held that there was a grave
deficiency of service. The Forum awarded the respondents interest at 12%
per annum on the entire deposited amount after two years from the date of
issuance of allotment letters to the respondents till the development and
notification of the area in question is not done. The respondents were
directed to deposit the remaining balance amount and the appellant-Board
was directed not to levy any charge, penalty or interest on the same.
However, the Forum refused to allow the compensation as prayed by the
respondents and directed the appellants to develop the area within a
month.
g) Being aggrieved, the appellant went in appeal before the State
Commission. Cross-appeals were also filed by the respondents before the
State Commission, seeking enhancement of the rate of interest from 12% to
18% per annum and further sought compensation. On November 10, 2004, both
the appeals were dismissed. The State Commission upheld the order of the
District Forum holding that the report of the Local Commissioner did not
raise any objection with regard thereto nor placed any notification
before the District Forum. In these circumstances, the appellant herein
filed a revision petition before the National Commission resulting in
dismissal, hence, the matter has come up in appeal before us.
3. It is the case of the appellant that all the three fora below have erred
in fact and in law by omitting to take into consideration the fact that
the payment of instalments towards the cost by the respondents was
unconditional. It was further contended that it was not subject to
fulfilment of any condition on the part of the appellant as a pre-
requisite. Moreover, all the three fora lost sight of the fact that under
Section 8 of the Act, after creation of a sub-market yard by notification
under Section 7(2) of the said Act, no person could be allowed to trade
in agricultural produce without licence and they had to apply for the
same under Section 9 of the said Act, and further to obtain a licence
under Section 10 of the said Act.
4. It is not in dispute that the respondents duly applied for licence under
Section 9 and which was granted under Section 10 permitting them to trade
in agricultural produce in the sub-market yard from their allotted shops
under Section 8, which was possible only when there was a notification
under Section 7(2) to invoke notifying the sub-market yard, according to
the appellant, the same was notified by a Notification dated October 31,
1980 passed by the predecessor-in-interest of the appellant and the same
is still subsisting and remained in force after the transfer of the area
to the appellant in 1986. Therefore, according to the learned counsel
appearing in support of this appeal, all the fora failed to take any note
thereof. It was further pointed out that there was no question of any
deficiency in service. According to the learned counsel, the area of
Adampur Mandi was developed in the year 1992 by the Haryana Public Health
Department by providing all basic amenities like sewerage, drainage,
electricity, roads etc. in the said area. It was further pointed out that
the report of the Local Commissioner would show that all the
developmental works except construction of the boundary walls have been
carried out by the appellant-Board. It was further submitted that the
sanctioning of the business licence under Section 10 of the said Act pre-
supposes that the State Government notified the said area as a market
area. It is further contended that the respondents are using the plots
allotted to them without paying the instalments as ought to have been
done by them.
5. Per contra, it is submitted by Mr. N.S. Dalal, learned counsel for the
respondents, that no developed infrastructure has been provided by the
appellant and the first two courts below have come to the conclusion on
the basis of the facts placed before them. Since there is a concurrent
finding on such facts, it is submitted that this appeal should be
dismissed. Learned counsel further submitted that the Local Commissioner
– Mr. Balhara – in the presence of both the parties carried out the local
inspection and the report of the said Commissioner would show that the
facts mentioned therein have been approved by both the parties. It was
pointed out that the Local Commissioner had mentioned that no
infrastructure has been provided, there is no platform, no boundary walls
and heaps of debris are lying there, meaning thereby the purpose for
which the Mandi was created could not be carried out or used or even
started or accomplished. In the absence of basic infrastructure and
amenities to run a grain market the purpose for which the shops were
allotted, is totally frustrated. The report of the Local Commissioner was
not challenged by the appellant at any point of time. It was further
pointed out that the appellant never relied on the said notification
before the District Forum or before the State Commission nor even before
the National Commission. Therefore, the grounds tried to be raised by the
learned counsel for the appellant cannot have any bearing on the matter.
It is further contended that the District Forum as well as the State
Commission have recorded how there could have been notification by the
appellant when the land itself came to the appellant in the year 1986.
Therefore, there cannot be any reason to believe that the notification
was issued earlier under the ownership of the appellant. It is further
stated that no explanation has been given by the appellant about the
conduct of non-developing the area in question by them. On the contrary,
the respondents relied on the doctrine of legitimate expectations to have
a proper area to continue with their business.
6. The appellant-Board has contended before us that the respondents are not
consumers but we must keep it on record that the Board never challenged
the jurisdiction of the consumer forum. We would reiterate that the
statutory Boards and Development Authorities which are allotting sites
with the promise of development, are amenable to the jurisdiction of
consumer forum in case of deficiency of services as has already been
decided in U.T. Chandigarh Administration & Anr. v. Amarjeet Singh &
Ors.[1]; Karnataka Industrial Areas and Development Board v. Nandi Cold
Storage Pvt. Ltd.[2]. This Court in Narne Construction (P) Ltd. v. Union
of India [3] referred to its earlier decision in Lucknow Development
Authority v. M.K. Gupta [4] and duly discussed the wide connotation of
the terms “consumer” and “service” under the consumer protection laws and
reiterated the observation of this Court in Lucknow Development Authority
v. M.K. Gupta (supra) which is provided hereunder :
“5. In the context of the housing construction and building
activities carried on by a private or statutory body and whether such
activity tantamounts to service within the meaning of clause (o) of
Section 2(1) of the Act, the Court observed: (LDA case, SCC pp. 256-
57, para 6):
“…when a statutory authority develops land or allots a site or
constructs a house for the benefit of common man it is as much
service as by a builder or contractor. The one is contractual
service and the 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….”
7. Though in the present case providing of amenities is not a condition
precedent as per the terms of the allotment letters. However, the
allotments were made when the plots were in the development stage on the
condition that they be used only for auction and trading of grains,
therefore, the present auction is different from a free public auction or
an auction on “as is where is basis”. In such a scenario the appellant
board as service provider is obligated to facilitate the utilization and
enjoyment of the plots as intended by the allottees and set out in the
allotment letter. In Municipal Corporation, Chandigarh & Ors. v.
Shantikunj Investment (P) Ltd.& Ors.[5], wherein the allottees refused to
pay instalments towards the cost of the allotted plots, this Court while
deciding the same held (at para 38) as under:
“We make it clear that though it was not a condition precedent but
there is a obligation on the part of the Administration to provide
necessary facilities for full enjoyment of the same by allottees”
In the aforementioned case, the Court remitted many of the cases back to
the High Court for limited adjudication of facts to determine where the
basic facilities have not been provided and held that though the allottees
were incorrect unilateral action of not paying the instalments yet penal
interest and penalty will be levied as per the facts of each case. Thus,
the allottees were entitled to proportionate relief. In Haryana State
Agricultural Marketing Board v. Raj Pal [6], wherein the appellant was
involved and the certain allottees refused to pay instalments towards the
allotted plots in the new grain market at Karnal-Pehowa Road at Nighdu in
the Karnal District, citing lack of amenities provided by the Board, the
Court while dismissing the case of the Board referred to the following
decisions in Municipal Corporation, Chandigarh & Ors. v. Shantikunj
Investment (P) Ltd. and Ors. (supra) and UT Chandigarh Administration &
Anr. v. Amarjeet Singh & Ors. (supra) as under :
“13. In Municipal Corpn., Chandigarh v. Shantikunj Investment (P)
Ltd., this Court held: (SCC p. 128, para 38)
“38. … We make it clear that though it was not a condition
precedent but there is obligation on the part of the
Administration to provide necessary facilities for full enjoyment
of the same by the allottees. We therefore, remit the matter to
the High Court for a very limited purpose to see that in cases
where facilities like kutcha road, drainage, drinking water,
sewerage, street lighting have not been provided, then in that
case, the High Court may grant the allottees some proportionate
relief. Therefore, we direct that all these cases be remitted to
the High Court and the High Court may consider that in case where
kutcha road, drainage, sewerage, drinking water facilities have
been provided, no relief shall be granted but in case any of the
facilities had not been provided, then the High Court may examine
the same and consider grant of proportionate relief in the matter
of payment of penalty under Rule 12(3) and interest for delay in
payment of equated installment or ground rent or part thereof
under Rule 12(3-A) only. We repeat again that in case the above
facilities had not been granted then in that case consider grant
of proportionate relief and if the facilities have been provided
then it will not be open on the part of the allottees to deny
payment of interest and penalty. So far as payment of installment
is concerned, this is a part of the contract and therefore, the
allottees are under obligation to pay the same. However, so far as
the question of payment of penalty and penal interest in
concerned, that shall depend on the facts of each case to be
examined by the High Court. The High Court shall examine each
individual case and consider grant of proportionate relief.”
14. Referring to the said decision, this Court in UT Chandigarh Admn.
v. Amarjeet Singh observed as follows: (SCC pp. 682-83, para 46)
“46. As noticed above, in Shantikunj, the auction was of the year
1989. The lessee had approached the High Court in its writ
jurisdiction in the year 1999 seeking amenities. Even in 2006 when
this Court heard the matter, it was alleged that the amenities had
not been provided. It is in those peculiar facts that this Court
obviously thought it fit to give some reliefs with reference to
penal interest wherever amenities had not been provided at all
even after 17 years. In fact, this Court made it clear while
remanding to the High Court that wherever facilities/amenities had
been provided before the date of the judgment (28-2-2006), the
lessees will not be entitled to any reliefs and where the
facilities/amenities had not been granted even in 2006, the High
Court may consider giving some relief by proportionate reduction
in [the] penal interest. This direction was apparently on the
assumption that in case of penalty, the court can grant relief in
writ jurisdictions.”
In Haryana State Agricultural Marketing Board v. Raj Pal (supra), the Court
upheld the principles as laid down in Shantikunj Case (supra) and Amarjeet
Singh Case (supra) and held that allottees cannot postpone the payment of
instalments on the grounds that some of the amenities were not provided and
the Court setting aside the penal and compound interest levied by the Board
and in consonance with the Allotment Rules of 1997, levied only simple
interest.
8. In the present case, the inaction on the part of the appellant in
providing the requisite facilities for more than a decade clearly
establishes deficiency of services as the respondents were prevented from
carrying out the grain business. However, the respondents were also
incorrect in refusing to pay the instalments and violating the terms of
the instalment letter. Thus, considering the surrounding circumstances
wherein the appellant has been unable to develop the area for more than
two decades and the resultant loss suffered by the respondents, we are of
the opinion that in the present situation, there is a need for
proportionate relief as the levy of penal interest and other charges on
the respondents will be grossly unfair.
9. In these circumstances, we do not find that any grounds have been made
out by the appellant to interfere with the order passed by the National
Commission. We have minutely examined the order passed by the District
Forum as well as the State Commission, and we have noticed that adequate
relief has been granted even to the respondents/complainants by awarding
interest @ 12 per cent per annum on the entire deposited amounts. Hence,
we do not find any merit in the appeal and the same is accordingly
dismissed. There shall, however, be no order as to costs.
…....……………………..J.
(Gyan Sudha Misra)
New Delhi;
.........…………………….J.
March 26, 2014. (Pinaki
Chandra Ghose)
-----------------------
[1] (2009) 4 SCC 460
[2] (2007) 10 SCC 481
[3] (2012) 5 SCC 359
[4] (1994) 1 SCC 243
[5] (2006) 4 SCC 109
[6] (2011) 13 SCC 504
-----------------------
13
On non-payment of the installments, the appellant called upon the
respondents to make the balance payments, being 75% of the cost with
interest and penalty charges as prescribed in the said allotment letter.
The respondents did not pay the same and filed a complaint before the
District Forum alleging deficiency of services, failure to notify the
Adampur Mandi as Market Area and failure to develop and provide basic
amenities in the said locality. The appellant opposed the complaint on
the ground that the respondents failed to make the payments of the
instalments and further that one of the complainants was not dealing
with the sale and purchase of agricultural produce by himself and instead
had sublet the shop to someone else.=
The
District Forum after perusing the report dated April 25, 2000 filed by
the Local Commissioner – Mr. Balhara, Advocate -- held that it is
admitted by both the parties that the Additional Mandi has no boundary
walls and gates and that there has been no notification by the appellant-
Board, further no auction has been made by the respondents and the
debris are lying around the shops. In these circumstances, the District
Forum by order dated September 20, 2001 held that it is admitted that due
to the omission of the appellant, no business could be done in the Mandi
and the boundary walls which are essential for the business, were not
provided. It is further held that the notification dated October 31, 1980
has no manner of application since the land was transferred to the
appellant in 1986 and the shops were auctioned in 1981. The District
Forum further held that due to the omission of the appellant, the
complainants/respondents herein were deprived of doing the grain business
for which the plots were purchased and in the absence of the notification
of the area as a sub-yard, the District Forum held that there was a grave
deficiency of service. The Forum awarded the respondents interest at 12%
per annum on the entire deposited amount after two years from the date of
issuance of allotment letters to the respondents till the development and
notification of the area in question is not done. The respondents were
directed to deposit the remaining balance amount and the appellant-Board
was directed not to levy any charge, penalty or interest on the same.
However, the Forum refused to allow the compensation as prayed by the
respondents and directed the appellants to develop the area within a
month. =
In Haryana State Agricultural Marketing Board v. Raj Pal (supra), the Court
upheld the principles as laid down in Shantikunj Case (supra) and Amarjeet
Singh Case (supra) and held that allottees cannot postpone the payment of
instalments on the grounds that some of the amenities were not provided and
the Court setting aside the penal and compound interest levied by the Board
and in consonance with the Allotment Rules of 1997, levied only simple
interest.
8. In the present case, the inaction on the part of the appellant in
providing the requisite facilities for more than a decade clearly
establishes deficiency of services as the respondents were prevented from
carrying out the grain business.
However, the respondents were also
incorrect in refusing to pay the instalments and violating the terms of
the instalment letter.
Thus, considering the surrounding circumstances
wherein the appellant has been unable to develop the area for more than
two decades and the resultant loss suffered by the respondents, we are of
the opinion that in the present situation, there is a need for
proportionate relief as the levy of penal interest and other charges on
the respondents will be grossly unfair.
9. In these circumstances, we do not find that any grounds have been made
out by the appellant to interfere with the order passed by the National
Commission. We have minutely examined the order passed by the District
Forum as well as the State Commission, and we have noticed that adequate
relief has been granted even to the respondents/complainants by awarding
interest @ 12 per cent per annum on the entire deposited amounts. Hence,
we do not find any merit in the appeal and the same is accordingly
dismissed.
2014 (March. Part ) judis.nic.in/supremecourt/filename=41340
GYAN SUDHA MISRA, PINAKI CHANDRA GHOSE
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3122 OF 2006
Haryana State Agricultural Marketing Board … Appellant
vs.
Bishamber Dayal Goyal and Ors. … Respondents
J U D G M E N T
Pinaki Chandra Ghose, J.
1. The present appeal has been filed assailing the order dated April 13,
2005 passed by the National Consumer Disputes Redressal Commission
(hereinafter referred to as “the National Commission”) in Revision
Petition Nos. 534-537 of 2005, affirming the order dated November 10,
2004 passed by the State Consumer Disputes Redressal Commission,
Chandigarh (hereinafter referred to as “the State Commission”), which
further confirmed the order dated September 20, 2001 passed by the
District Forum.
2. The facts of the case briefly are as follows :
a) By a notification dated November 16, 1971, the Haryana State Government
under Section 7 of the Punjab Agricultural Produce Markets Act, 1961
(hereinafter referred to as ‘the said Act’), notified the area of New
Grain Mandi, Adampur as Market Area. Subsequently, in the year 1974, the
areas/limits were further extended by five kilometers. In 1980, the State
Government notified a sub-market yard of New Grain Mandi, Adampur. The
Colonization Department of the State by a letter dated January 24, 1986,
transferred the said area to the Haryana State Agricultural Marketing
Board, the appellant herein.
b) The respondents herein were allotted plots by the appellant, being plot
Nos. 17, 7, 16 and 14 upon depositing the 25% of the price of the said
plots. The method of payment and the consequences for non-payment of any
instalment would appear from the allotment letter dated July 25, 1991.
Admittedly, the respondents did not pay the instalments in terms of the
allotment letters. The grounds mentioned by the respondents for non-
payment of such instalments were the failure on the part of the appellant
to provide basic amenities such as sewerage, electricity, roads etc. at
the said Adampur Mandi Area.
c) On non-payment of the instalments, the appellant called upon the
respondents to make the balance payments, being 75% of the cost with
interest and penalty charges as prescribed in the said allotment letter.
The respondents did not pay the same and filed a complaint before the
District Forum alleging deficiency of services, failure to notify the
Adampur Mandi as Market Area and failure to develop and provide basic
amenities in the said locality. The appellant opposed the complaint on
the ground that the respondents failed to make the payments of the
instalments and further that one of the complainants was not dealing
with the sale and purchase of agricultural produce by himself and instead
had sublet the shop to someone else.
d) The District Forum appointed a Senior Member of the Forum as the Local
Commissioner to inspect the said area and to file a report. The Local
Commissioner filed a report stating that the area was developed with
civic amenities and platforms were constructed in front of the shops.
However, it is admitted that the complainant is not in a position to run
the business in the market area as the same has not been notified by a
notification and/or order declaring it as a sub-yard for the purpose of
running the business. The District Forum held by order dated March 4,
1998 that the notification dated October 31, 1980 is not applicable since
the land was auctioned in 1991 and further, the same was not in the
ownership of the appellant and no business was transacted by the
complainant at the Adampur Mandi. The District Forum held that since no
notification was issued declaring the said area as sub-yard, it amounts
to deficiency of service and the appellant was directed to withdraw the
demand notice and further directed not to charge any interest on the
instalments. The appellant filed first appeal before the State
Commission, being First Appeal No.362 of 1998. The State Commissioner by
order dated March 3, 1998 remanded the matter to the District Forum
holding that the appointment of Local Commissioner, Shri Arya, being a
member of the District Forum vitiated the proceedings.
e) Thereafter, the District Forum took up the matter and appointed an
Advocate - Mr. G.L. Balhara - as the Local Commissioner, to make an
inspection and to file a report. The appellant herein on April 20, 2000,
once again issued demand notices to the respondents demanding the
payments. The main contention of the respondents being the complainants
was that although the area was not notified by the appellant-Board as a
market area, they were unable to conduct any grain business in the shops
for which they had purchased the said plots; and further alleged that no
basic amenities, i.e., sewerage, roads, parao, electricity etc. had been
provided by the Board, and that there were no boundary walls and gates of
the market area which were a necessity in such Mandi; furthermore, there
were heaps of debris lying around the shops. In these circumstances, the
plots allotted were redundant.
f) The appellants contended that the complainants are not consumers and
there is no deficiency of service. The respondents failed to construct
the booths in two years’ time even after getting the licences.
Furthermore, the respondents are not dealing with the agricultural
produce instead they have sublet the plots in question to other persons.
According to the appellants, the amenities of sewerage, water supply and
electricity were provided and construction of a platform was also done by
them. An Additional Mandi was established, according to the appellant, by
the Colonization Department and subsequently transferred to them in 1986.
The Colonization Department, in 1980, duly notified the same. The
District Forum after perusing the report dated April 25, 2000 filed by
the Local Commissioner – Mr. Balhara, Advocate -- held that it is
admitted by both the parties that the Additional Mandi has no boundary
walls and gates and that there has been no notification by the appellant-
Board, further no auction has been made by the respondents and the
debris are lying around the shops. In these circumstances, the District
Forum by order dated September 20, 2001 held that it is admitted that due
to the omission of the appellant, no business could be done in the Mandi
and the boundary walls which are essential for the business, were not
provided. It is further held that the notification dated October 31, 1980
has no manner of application since the land was transferred to the
appellant in 1986 and the shops were auctioned in 1981. The District
Forum further held that due to the omission of the appellant, the
complainants/respondents herein were deprived of doing the grain business
for which the plots were purchased and in the absence of the notification
of the area as a sub-yard, the District Forum held that there was a grave
deficiency of service. The Forum awarded the respondents interest at 12%
per annum on the entire deposited amount after two years from the date of
issuance of allotment letters to the respondents till the development and
notification of the area in question is not done. The respondents were
directed to deposit the remaining balance amount and the appellant-Board
was directed not to levy any charge, penalty or interest on the same.
However, the Forum refused to allow the compensation as prayed by the
respondents and directed the appellants to develop the area within a
month.
g) Being aggrieved, the appellant went in appeal before the State
Commission. Cross-appeals were also filed by the respondents before the
State Commission, seeking enhancement of the rate of interest from 12% to
18% per annum and further sought compensation. On November 10, 2004, both
the appeals were dismissed. The State Commission upheld the order of the
District Forum holding that the report of the Local Commissioner did not
raise any objection with regard thereto nor placed any notification
before the District Forum. In these circumstances, the appellant herein
filed a revision petition before the National Commission resulting in
dismissal, hence, the matter has come up in appeal before us.
3. It is the case of the appellant that all the three fora below have erred
in fact and in law by omitting to take into consideration the fact that
the payment of instalments towards the cost by the respondents was
unconditional. It was further contended that it was not subject to
fulfilment of any condition on the part of the appellant as a pre-
requisite. Moreover, all the three fora lost sight of the fact that under
Section 8 of the Act, after creation of a sub-market yard by notification
under Section 7(2) of the said Act, no person could be allowed to trade
in agricultural produce without licence and they had to apply for the
same under Section 9 of the said Act, and further to obtain a licence
under Section 10 of the said Act.
4. It is not in dispute that the respondents duly applied for licence under
Section 9 and which was granted under Section 10 permitting them to trade
in agricultural produce in the sub-market yard from their allotted shops
under Section 8, which was possible only when there was a notification
under Section 7(2) to invoke notifying the sub-market yard, according to
the appellant, the same was notified by a Notification dated October 31,
1980 passed by the predecessor-in-interest of the appellant and the same
is still subsisting and remained in force after the transfer of the area
to the appellant in 1986. Therefore, according to the learned counsel
appearing in support of this appeal, all the fora failed to take any note
thereof. It was further pointed out that there was no question of any
deficiency in service. According to the learned counsel, the area of
Adampur Mandi was developed in the year 1992 by the Haryana Public Health
Department by providing all basic amenities like sewerage, drainage,
electricity, roads etc. in the said area. It was further pointed out that
the report of the Local Commissioner would show that all the
developmental works except construction of the boundary walls have been
carried out by the appellant-Board. It was further submitted that the
sanctioning of the business licence under Section 10 of the said Act pre-
supposes that the State Government notified the said area as a market
area. It is further contended that the respondents are using the plots
allotted to them without paying the instalments as ought to have been
done by them.
5. Per contra, it is submitted by Mr. N.S. Dalal, learned counsel for the
respondents, that no developed infrastructure has been provided by the
appellant and the first two courts below have come to the conclusion on
the basis of the facts placed before them. Since there is a concurrent
finding on such facts, it is submitted that this appeal should be
dismissed. Learned counsel further submitted that the Local Commissioner
– Mr. Balhara – in the presence of both the parties carried out the local
inspection and the report of the said Commissioner would show that the
facts mentioned therein have been approved by both the parties. It was
pointed out that the Local Commissioner had mentioned that no
infrastructure has been provided, there is no platform, no boundary walls
and heaps of debris are lying there, meaning thereby the purpose for
which the Mandi was created could not be carried out or used or even
started or accomplished. In the absence of basic infrastructure and
amenities to run a grain market the purpose for which the shops were
allotted, is totally frustrated. The report of the Local Commissioner was
not challenged by the appellant at any point of time. It was further
pointed out that the appellant never relied on the said notification
before the District Forum or before the State Commission nor even before
the National Commission. Therefore, the grounds tried to be raised by the
learned counsel for the appellant cannot have any bearing on the matter.
It is further contended that the District Forum as well as the State
Commission have recorded how there could have been notification by the
appellant when the land itself came to the appellant in the year 1986.
Therefore, there cannot be any reason to believe that the notification
was issued earlier under the ownership of the appellant. It is further
stated that no explanation has been given by the appellant about the
conduct of non-developing the area in question by them. On the contrary,
the respondents relied on the doctrine of legitimate expectations to have
a proper area to continue with their business.
6. The appellant-Board has contended before us that the respondents are not
consumers but we must keep it on record that the Board never challenged
the jurisdiction of the consumer forum. We would reiterate that the
statutory Boards and Development Authorities which are allotting sites
with the promise of development, are amenable to the jurisdiction of
consumer forum in case of deficiency of services as has already been
decided in U.T. Chandigarh Administration & Anr. v. Amarjeet Singh &
Ors.[1]; Karnataka Industrial Areas and Development Board v. Nandi Cold
Storage Pvt. Ltd.[2]. This Court in Narne Construction (P) Ltd. v. Union
of India [3] referred to its earlier decision in Lucknow Development
Authority v. M.K. Gupta [4] and duly discussed the wide connotation of
the terms “consumer” and “service” under the consumer protection laws and
reiterated the observation of this Court in Lucknow Development Authority
v. M.K. Gupta (supra) which is provided hereunder :
“5. In the context of the housing construction and building
activities carried on by a private or statutory body and whether such
activity tantamounts to service within the meaning of clause (o) of
Section 2(1) of the Act, the Court observed: (LDA case, SCC pp. 256-
57, para 6):
“…when a statutory authority develops land or allots a site or
constructs a house for the benefit of common man it is as much
service as by a builder or contractor. The one is contractual
service and the 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….”
7. Though in the present case providing of amenities is not a condition
precedent as per the terms of the allotment letters. However, the
allotments were made when the plots were in the development stage on the
condition that they be used only for auction and trading of grains,
therefore, the present auction is different from a free public auction or
an auction on “as is where is basis”. In such a scenario the appellant
board as service provider is obligated to facilitate the utilization and
enjoyment of the plots as intended by the allottees and set out in the
allotment letter. In Municipal Corporation, Chandigarh & Ors. v.
Shantikunj Investment (P) Ltd.& Ors.[5], wherein the allottees refused to
pay instalments towards the cost of the allotted plots, this Court while
deciding the same held (at para 38) as under:
“We make it clear that though it was not a condition precedent but
there is a obligation on the part of the Administration to provide
necessary facilities for full enjoyment of the same by allottees”
In the aforementioned case, the Court remitted many of the cases back to
the High Court for limited adjudication of facts to determine where the
basic facilities have not been provided and held that though the allottees
were incorrect unilateral action of not paying the instalments yet penal
interest and penalty will be levied as per the facts of each case. Thus,
the allottees were entitled to proportionate relief. In Haryana State
Agricultural Marketing Board v. Raj Pal [6], wherein the appellant was
involved and the certain allottees refused to pay instalments towards the
allotted plots in the new grain market at Karnal-Pehowa Road at Nighdu in
the Karnal District, citing lack of amenities provided by the Board, the
Court while dismissing the case of the Board referred to the following
decisions in Municipal Corporation, Chandigarh & Ors. v. Shantikunj
Investment (P) Ltd. and Ors. (supra) and UT Chandigarh Administration &
Anr. v. Amarjeet Singh & Ors. (supra) as under :
“13. In Municipal Corpn., Chandigarh v. Shantikunj Investment (P)
Ltd., this Court held: (SCC p. 128, para 38)
“38. … We make it clear that though it was not a condition
precedent but there is obligation on the part of the
Administration to provide necessary facilities for full enjoyment
of the same by the allottees. We therefore, remit the matter to
the High Court for a very limited purpose to see that in cases
where facilities like kutcha road, drainage, drinking water,
sewerage, street lighting have not been provided, then in that
case, the High Court may grant the allottees some proportionate
relief. Therefore, we direct that all these cases be remitted to
the High Court and the High Court may consider that in case where
kutcha road, drainage, sewerage, drinking water facilities have
been provided, no relief shall be granted but in case any of the
facilities had not been provided, then the High Court may examine
the same and consider grant of proportionate relief in the matter
of payment of penalty under Rule 12(3) and interest for delay in
payment of equated installment or ground rent or part thereof
under Rule 12(3-A) only. We repeat again that in case the above
facilities had not been granted then in that case consider grant
of proportionate relief and if the facilities have been provided
then it will not be open on the part of the allottees to deny
payment of interest and penalty. So far as payment of installment
is concerned, this is a part of the contract and therefore, the
allottees are under obligation to pay the same. However, so far as
the question of payment of penalty and penal interest in
concerned, that shall depend on the facts of each case to be
examined by the High Court. The High Court shall examine each
individual case and consider grant of proportionate relief.”
14. Referring to the said decision, this Court in UT Chandigarh Admn.
v. Amarjeet Singh observed as follows: (SCC pp. 682-83, para 46)
“46. As noticed above, in Shantikunj, the auction was of the year
1989. The lessee had approached the High Court in its writ
jurisdiction in the year 1999 seeking amenities. Even in 2006 when
this Court heard the matter, it was alleged that the amenities had
not been provided. It is in those peculiar facts that this Court
obviously thought it fit to give some reliefs with reference to
penal interest wherever amenities had not been provided at all
even after 17 years. In fact, this Court made it clear while
remanding to the High Court that wherever facilities/amenities had
been provided before the date of the judgment (28-2-2006), the
lessees will not be entitled to any reliefs and where the
facilities/amenities had not been granted even in 2006, the High
Court may consider giving some relief by proportionate reduction
in [the] penal interest. This direction was apparently on the
assumption that in case of penalty, the court can grant relief in
writ jurisdictions.”
In Haryana State Agricultural Marketing Board v. Raj Pal (supra), the Court
upheld the principles as laid down in Shantikunj Case (supra) and Amarjeet
Singh Case (supra) and held that allottees cannot postpone the payment of
instalments on the grounds that some of the amenities were not provided and
the Court setting aside the penal and compound interest levied by the Board
and in consonance with the Allotment Rules of 1997, levied only simple
interest.
8. In the present case, the inaction on the part of the appellant in
providing the requisite facilities for more than a decade clearly
establishes deficiency of services as the respondents were prevented from
carrying out the grain business. However, the respondents were also
incorrect in refusing to pay the instalments and violating the terms of
the instalment letter. Thus, considering the surrounding circumstances
wherein the appellant has been unable to develop the area for more than
two decades and the resultant loss suffered by the respondents, we are of
the opinion that in the present situation, there is a need for
proportionate relief as the levy of penal interest and other charges on
the respondents will be grossly unfair.
9. In these circumstances, we do not find that any grounds have been made
out by the appellant to interfere with the order passed by the National
Commission. We have minutely examined the order passed by the District
Forum as well as the State Commission, and we have noticed that adequate
relief has been granted even to the respondents/complainants by awarding
interest @ 12 per cent per annum on the entire deposited amounts. Hence,
we do not find any merit in the appeal and the same is accordingly
dismissed. There shall, however, be no order as to costs.
…....……………………..J.
(Gyan Sudha Misra)
New Delhi;
.........…………………….J.
March 26, 2014. (Pinaki
Chandra Ghose)
-----------------------
[1] (2009) 4 SCC 460
[2] (2007) 10 SCC 481
[3] (2012) 5 SCC 359
[4] (1994) 1 SCC 243
[5] (2006) 4 SCC 109
[6] (2011) 13 SCC 504
-----------------------
13
