Non-Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 7335 of 2008
CHIEF ADMINISTRATOR, H.U.D.A. & ANR.
.... Appellant(s)
Versus
SHAKUNTLA DEVI
….Respondent(s)
J U D G M E N T
L. NAGESWARA RAO, J.
This Appeal is filed challenging the order dated 25.09.2007 of the
National Consumer Disputes Redressal Commission, New Delhi (hereinafter
referred to as ‘National Commission’) by which an order of the State
Consumer Disputes Redressal Commission, Union Territory, Chandigarh
(hereinafter referred to as ‘State Commission’) awarding compensation to
the Respondent was confirmed.
The Respondent was allotted Plot No. 40, measuring 40 marlas in Sector 8,
Urban Estate, Karnal on 03.04.1987. As physical possession of the plot was
not given to her by the Appellants, the Respondent filed Original Complaint
No. 54 of 1997 before the State Commission. In the said complaint,
the Respondent alleged that she had paid the full price of the plot
including the enhancement fee as per the terms and conditions of the
allotment letter. She averred that she was not given the possession of the
plot in spite of repeated requests. The Respondent also pleaded in the
complaint that the Appellants were required to complete the development
work within 2 years from the date of the allotment letter and hand over the
physical possession. She further stated that she wanted to construct a
house and the delay in handing over physical possession of the plot
resulted in additional expenditure for the building as the price of
construction material increased manifold from 1988 to 1997. On the basis
of the above averments, the Respondent sought for the following reliefs in
Original Complaint No. 54 of 1997:
“That the opposite party be directed not to charge any extension fees for
not constructing the plot within the stipulated period which could not be
done because of non delivery of the physical possession of the plot.
HUDA be directed not to charge interest at all on the amount because the
HUDA had offered a paper possession in the year 1982 and had not handed
over the physical /actual possession till date.
HUDA be directed to deliver the physical possession immediately after
completing development work as per the brochure and advertisement and after
providing the community service such as schools, community centre, hospital
etc. in the sector.
The HUDA be directed to give compensation of 1.00 lac against harassment
mental agony suffered due to the act and conduct of HUDA.
Directed to give cost to the complainant for Rs. 20,000/- against the
expenditure incurred in filing this complaint and as well as for spending
the amount for visiting the office of the last 8 years.
The complainant be awarded interest at the rate of 18 % on the amount
deposited on various time till the actual possession of the plot is given.
The Respondent be directed to pay Rs. 5.00 lac escalation cost of the
construction material.”
The Appellants filed a written statement in which it was stated that the
Respondent was allotted the plot from the Government Discretionary Quota
vide Allotment Letter No. 5049 dated 03.04.1987. The Appellants alleged
that the Respondent did not seek delivery of possession prior to
16.07.1997. It was also stated in the written statement that an amount of
Rs.28,000/- was still outstanding. It was further alleged that the
Respondent was not interested in constructing a house and that no building
plan was submitted for approval.
The State Commission by its order dated 21.12.1998 held that the Respondent
has established deficiency of service by the Appellants as there was delay
in handing over physical possession of the plot. The complaint was allowed
and the Appellants were directed to deliver vacant physical possession of
the plot, if not already done, to the Respondent within one month from the
date of receipt of the order. There was a further direction to pay
interest on the amount deposited by the Respondent at the rate of 12% with
effect from 03.04.1989 and to pay a sum of Rs.2 lakhs as compensation on
account of escalation in the cost of construction etc. The Appellants
were also directed to pay Rs.20,000/- towards compensation for monetary
loss and mental harassment suffered by the Respondent.
Aggrieved by the said order dated 21.12.1998 of the State Commission, the
Appellants filed an appeal before the National Commission. The National
Commission confined the dispute in First Appeal No. 154 of 1999 only to the
award of compensation of Rs.2 lakhs relating to escalation in cost of
construction. The other reliefs pertaining to payment of compensation
towards monetary loss and mental harassment of Rs. 20,000/- and interest on
the amount deposited by the Respondent were confirmed. The National
Commission remanded the matter for re-consideration of compensation for
escalation of cost of construction in accordance with CPWD rates.
The State Commission reconsidered the matter and permitted both sides to
produce evidence which would enable it to compute the compensation for
escalation of construction cost as per CPWD rates. The Respondent produced
evidence to show that the escalation in cost of construction between April,
1989 and January, 2000 would be Rs. 18,67,000/-. An affidavit dated
06.02.2007 was filed by Sh. Vikram Singh Malik, Estate Officer, HUDA,
Karnal on behalf of the Appellants in which it was stated that the physical
possession of the plot was given to the Respondent on 21.01.2000. The
Respondent submitted a building plan only on 14.02.2006 which would clearly
prove that the Respondent was not interested in constructing the house.
The submission of the Appellants that the Respondent was not entitled for
more than Rs. 2,00,000/- towards increase in the construction cost was
rejected by the State Commission on the ground that the National Commission
directed computation of compensation at CPWD rates and that there was no
restriction in the order of remand. The material produced by the
Respondent to prove escalation in the cost of construction was accepted by
the State Commission which held that the Respondent was entitled for a sum
of Rs. 18,67,000/- as compensation. However, the State Commission held that
since the Respondent did not commence construction till 2006 with a view to
get more compensation. Therefore, she was awarded a compensation of Rs.
15,00,000/- instead of Rs. 18,67,000/- towards increase in the cost of
construction.
The National Commission by an order dated 25.09.2007 dismissed Appeal No.
525 of 2007 filed by the Appellants and confirmed the order passed by the
State Commission holding that the compensation awarded was just and
reasonable. According to the National Commission even if 15 % interest on
the amount of Rs.5 lakhs claimed by the Respondent for 10 years is awarded,
the Respondent would be entitled to Rs. 12.5 lakhs. Aggrieved by the order
dated 15.09.2007 in First Appeal No. 525 of 2007 of the National
Commission, the Appellants have filed this Appeal.
The Counsel for the Appellants submitted that the Respondent was allotted
the plot in the Government Discretionary Quota and that the Respondent did
not approach the Appellants seeking possession of the plot till 1997. He
also submitted that the Respondent did not commence the construction till
2006 though she was given possession on 21.01.2000. He further contended
that the State Commission erred in awarding Rs. 15 lakhs as compensation
when the earlier order granting Rs. 2 lakhs as compensation was not
challenged by the Respondent. According to him, the remand by the National
Commission was to examine whether the Respondent was entitled to Rs. 2
lakhs as compensation which meant that she cannot be given any compensation
beyond Rs. 2,00,000/-.
The Counsel for the Respondent submitted that there was no restriction in
the remand by the National Commission as the compensation towards
escalation of the cost of construction was directed to be calculated as per
CPWD rates. He submitted that the State Commission was right in awarding
Rs. 15 lakhs as compensation when the deficiency of service by the
Appellant in not handing over the possession of the plot till 2000 was
proved. He also urged that the Civil Procedure Code has limited
application in the Consumer Fora and relief cannot be denied on the grounds
of defective pleadings and the relief sought. He also submitted that
cogent material was placed before the State Commission to prove the
escalation in the cost of construction between 1989 and 2000.
The avowed object of the Consumer Protection Act, 1986 is to provide for
better protection of the interest of consumers. The statement of the
objects and reasons, inter alia, provides for a speedy and simple redressal
to consumer disputes. The quasi judicial bodies at the District, State and
Central levels were empowered to give relief to the consumers and award,
wherever appropriate, compensation to consumers.
Section 14 (1) (d) of the Act which is relevant for the adjudication of the
dispute in this case is as follows:
“14. Finding of the District Forum.- (1) If, after the proceeding conducted
under section 13, the District Forum is satisfied that the goods complained
against suffer from any of the defects specified in the complaint or that
any of the allegations contained in the complaint about the services are
proved, it shall issue an order to the opposite party directing him to do
one or more of the following things, namely:
…….
(d) to pay such amount as may be awarded by it as compensation to the
consumer for any loss or injury suffered by the consumer due to the
negligence of the opposite party.”
The sine qua non for entitlement of compensation is proof of loss or injury
suffered by the consumer due to the negligence of the opposite party. Once
the said conditions are satisfied, the Consumer Forum would have to decide
the quantum of compensation to which the consumer is entitled. There
cannot be any dispute that the computation of compensation has to be fair,
reasonable and commensurate to the loss or injury. There is a duty cast on
the Consumer Forum to take into account all relevant factors for arriving
at the compensation to be paid.
In Charan Singh v. Healing Touch Hospital and Others, reported in (2000) 7
SCC 668, this Court held as follows:
“12. ….. Indeed, calculation of damages depends on the facts and
circumstances of each case. No hard and fast rule can be laid down for
universal application. While awarding compensation, a Consumer Forum has to
take into account all relevant factors and assess compensation on the basis
of accepted legal principles, on moderation. It is for the Consumer Forum
to grant compensation to the extent it finds it reasonable, fair and proper
in the facts and circumstances of a given case according to the established
judicial standards where the claimant is able to establish his charge.”
In Ghaziabad Development Authority v. Balbir Singh, reported in
(2004) 4 SCC 65, this Court was considering the compensation to be awarded
to the consumers in cases of deficiency of service by Development
Authorities like the Appellant herein and Ghaziabad Development Authority.
Considering a situation similar to the one that arises in the instant case,
it was held as follows:
“9. That compensation cannot be uniform and can best be illustrated by
considering cases where possession is being directed to be delivered and
cases where only monies are directed to be returned. In cases where
possession is being directed to be delivered the compensation for
harassment will necessarily have to be less because in a way that party is
being compensated by increase in the value of the property he is getting.
*** *** ***
11. Further, in cases where the Commission/Forum has directed delivery of
possession, the party has to a certain extent already got a benefit. The
cost of the land/flat would have gone up in the meantime. Of course, even
in cases, where delivery of possession has been directed there could be
compensation for the harassment/ loss. But such compensation has to be
worked out after looking into the facts of each case and after determining
what is the amount of harassment/loss which has been caused to the
consumer.”
It is undisputed that the Appellant handed over the plot to the Respondent
only in the year 2000 instead of 1989. The Respondent had paid
Rs.1,22,400/- towards the cost of the plot at the rates prevailing in the
year of allotment i.e. 1986. There is no dispute that the Respondent was
paid Rs.1,28,188/- towards interest awarded by the State Commission. There
is also no dispute about the fact that the Respondent did not commence
construction till 2006. The State Commission while awarding the
compensation of Rs. 15 lakhs towards escalation in the cost of construction
commented on the conduct of the Respondent in delaying the construction
only with a view to claim higher compensation.
The point that falls for our consideration in this case is whether the
State Commission was justified in awarding Rs. 15 lakhs towards the
escalation in the cost of construction as compensation. We are of the view
that the Respondent is not entitled to such compensation awarded by the
State Commission and confirmed by the National Commission. The Respondent
suffered an injury due to the delay in handing over the possession as there
was definitely escalation in the cost of construction. At the same time the
Respondent has surely benefited by the increase in the cost of plot between
1989 to 2000. In our opinion, the order of the State Commission is
vitiated for non application of mind to a vital and relevant factor and
hence, suffers from the vice of unreasonableness. The State Commission
criticized the conduct of the Respondent in intentionally delaying the
construction for 6 years but still proceeded to award compensation. In
the facts and circumstances of this case, we are of the opinion that award
of interest would have been sufficient to compensate the Respondent for the
loss suffered by him due to the delay in handing over the possession of the
plot. The compensation of Rs. 15 lakhs awarded by the State Commission is
excessive. As we have not reversed the impugned order on any other ground,
it is not necessary for us to delve into other points that were urged by
the Respondent.
For the aforementioned reasons, the Order of the State Commission dated
05.07.2007 as confirmed by the National Commission is set aside and the
Appeal is allowed. No costs.
.…............................CJI
[T. S. THAKUR]
.........................................J
[DR. D. Y. CHANDRACHUD]
................................J
[L. NAGESWARA RAO]
New Delhi,
December 8, 2016
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 7335 of 2008
CHIEF ADMINISTRATOR, H.U.D.A. & ANR.
.... Appellant(s)
Versus
SHAKUNTLA DEVI
….Respondent(s)
J U D G M E N T
L. NAGESWARA RAO, J.
This Appeal is filed challenging the order dated 25.09.2007 of the
National Consumer Disputes Redressal Commission, New Delhi (hereinafter
referred to as ‘National Commission’) by which an order of the State
Consumer Disputes Redressal Commission, Union Territory, Chandigarh
(hereinafter referred to as ‘State Commission’) awarding compensation to
the Respondent was confirmed.
The Respondent was allotted Plot No. 40, measuring 40 marlas in Sector 8,
Urban Estate, Karnal on 03.04.1987. As physical possession of the plot was
not given to her by the Appellants, the Respondent filed Original Complaint
No. 54 of 1997 before the State Commission. In the said complaint,
the Respondent alleged that she had paid the full price of the plot
including the enhancement fee as per the terms and conditions of the
allotment letter. She averred that she was not given the possession of the
plot in spite of repeated requests. The Respondent also pleaded in the
complaint that the Appellants were required to complete the development
work within 2 years from the date of the allotment letter and hand over the
physical possession. She further stated that she wanted to construct a
house and the delay in handing over physical possession of the plot
resulted in additional expenditure for the building as the price of
construction material increased manifold from 1988 to 1997. On the basis
of the above averments, the Respondent sought for the following reliefs in
Original Complaint No. 54 of 1997:
“That the opposite party be directed not to charge any extension fees for
not constructing the plot within the stipulated period which could not be
done because of non delivery of the physical possession of the plot.
HUDA be directed not to charge interest at all on the amount because the
HUDA had offered a paper possession in the year 1982 and had not handed
over the physical /actual possession till date.
HUDA be directed to deliver the physical possession immediately after
completing development work as per the brochure and advertisement and after
providing the community service such as schools, community centre, hospital
etc. in the sector.
The HUDA be directed to give compensation of 1.00 lac against harassment
mental agony suffered due to the act and conduct of HUDA.
Directed to give cost to the complainant for Rs. 20,000/- against the
expenditure incurred in filing this complaint and as well as for spending
the amount for visiting the office of the last 8 years.
The complainant be awarded interest at the rate of 18 % on the amount
deposited on various time till the actual possession of the plot is given.
The Respondent be directed to pay Rs. 5.00 lac escalation cost of the
construction material.”
The Appellants filed a written statement in which it was stated that the
Respondent was allotted the plot from the Government Discretionary Quota
vide Allotment Letter No. 5049 dated 03.04.1987. The Appellants alleged
that the Respondent did not seek delivery of possession prior to
16.07.1997. It was also stated in the written statement that an amount of
Rs.28,000/- was still outstanding. It was further alleged that the
Respondent was not interested in constructing a house and that no building
plan was submitted for approval.
The State Commission by its order dated 21.12.1998 held that the Respondent
has established deficiency of service by the Appellants as there was delay
in handing over physical possession of the plot. The complaint was allowed
and the Appellants were directed to deliver vacant physical possession of
the plot, if not already done, to the Respondent within one month from the
date of receipt of the order. There was a further direction to pay
interest on the amount deposited by the Respondent at the rate of 12% with
effect from 03.04.1989 and to pay a sum of Rs.2 lakhs as compensation on
account of escalation in the cost of construction etc. The Appellants
were also directed to pay Rs.20,000/- towards compensation for monetary
loss and mental harassment suffered by the Respondent.
Aggrieved by the said order dated 21.12.1998 of the State Commission, the
Appellants filed an appeal before the National Commission. The National
Commission confined the dispute in First Appeal No. 154 of 1999 only to the
award of compensation of Rs.2 lakhs relating to escalation in cost of
construction. The other reliefs pertaining to payment of compensation
towards monetary loss and mental harassment of Rs. 20,000/- and interest on
the amount deposited by the Respondent were confirmed. The National
Commission remanded the matter for re-consideration of compensation for
escalation of cost of construction in accordance with CPWD rates.
The State Commission reconsidered the matter and permitted both sides to
produce evidence which would enable it to compute the compensation for
escalation of construction cost as per CPWD rates. The Respondent produced
evidence to show that the escalation in cost of construction between April,
1989 and January, 2000 would be Rs. 18,67,000/-. An affidavit dated
06.02.2007 was filed by Sh. Vikram Singh Malik, Estate Officer, HUDA,
Karnal on behalf of the Appellants in which it was stated that the physical
possession of the plot was given to the Respondent on 21.01.2000. The
Respondent submitted a building plan only on 14.02.2006 which would clearly
prove that the Respondent was not interested in constructing the house.
The submission of the Appellants that the Respondent was not entitled for
more than Rs. 2,00,000/- towards increase in the construction cost was
rejected by the State Commission on the ground that the National Commission
directed computation of compensation at CPWD rates and that there was no
restriction in the order of remand. The material produced by the
Respondent to prove escalation in the cost of construction was accepted by
the State Commission which held that the Respondent was entitled for a sum
of Rs. 18,67,000/- as compensation. However, the State Commission held that
since the Respondent did not commence construction till 2006 with a view to
get more compensation. Therefore, she was awarded a compensation of Rs.
15,00,000/- instead of Rs. 18,67,000/- towards increase in the cost of
construction.
The National Commission by an order dated 25.09.2007 dismissed Appeal No.
525 of 2007 filed by the Appellants and confirmed the order passed by the
State Commission holding that the compensation awarded was just and
reasonable. According to the National Commission even if 15 % interest on
the amount of Rs.5 lakhs claimed by the Respondent for 10 years is awarded,
the Respondent would be entitled to Rs. 12.5 lakhs. Aggrieved by the order
dated 15.09.2007 in First Appeal No. 525 of 2007 of the National
Commission, the Appellants have filed this Appeal.
The Counsel for the Appellants submitted that the Respondent was allotted
the plot in the Government Discretionary Quota and that the Respondent did
not approach the Appellants seeking possession of the plot till 1997. He
also submitted that the Respondent did not commence the construction till
2006 though she was given possession on 21.01.2000. He further contended
that the State Commission erred in awarding Rs. 15 lakhs as compensation
when the earlier order granting Rs. 2 lakhs as compensation was not
challenged by the Respondent. According to him, the remand by the National
Commission was to examine whether the Respondent was entitled to Rs. 2
lakhs as compensation which meant that she cannot be given any compensation
beyond Rs. 2,00,000/-.
The Counsel for the Respondent submitted that there was no restriction in
the remand by the National Commission as the compensation towards
escalation of the cost of construction was directed to be calculated as per
CPWD rates. He submitted that the State Commission was right in awarding
Rs. 15 lakhs as compensation when the deficiency of service by the
Appellant in not handing over the possession of the plot till 2000 was
proved. He also urged that the Civil Procedure Code has limited
application in the Consumer Fora and relief cannot be denied on the grounds
of defective pleadings and the relief sought. He also submitted that
cogent material was placed before the State Commission to prove the
escalation in the cost of construction between 1989 and 2000.
The avowed object of the Consumer Protection Act, 1986 is to provide for
better protection of the interest of consumers. The statement of the
objects and reasons, inter alia, provides for a speedy and simple redressal
to consumer disputes. The quasi judicial bodies at the District, State and
Central levels were empowered to give relief to the consumers and award,
wherever appropriate, compensation to consumers.
Section 14 (1) (d) of the Act which is relevant for the adjudication of the
dispute in this case is as follows:
“14. Finding of the District Forum.- (1) If, after the proceeding conducted
under section 13, the District Forum is satisfied that the goods complained
against suffer from any of the defects specified in the complaint or that
any of the allegations contained in the complaint about the services are
proved, it shall issue an order to the opposite party directing him to do
one or more of the following things, namely:
…….
(d) to pay such amount as may be awarded by it as compensation to the
consumer for any loss or injury suffered by the consumer due to the
negligence of the opposite party.”
The sine qua non for entitlement of compensation is proof of loss or injury
suffered by the consumer due to the negligence of the opposite party. Once
the said conditions are satisfied, the Consumer Forum would have to decide
the quantum of compensation to which the consumer is entitled. There
cannot be any dispute that the computation of compensation has to be fair,
reasonable and commensurate to the loss or injury. There is a duty cast on
the Consumer Forum to take into account all relevant factors for arriving
at the compensation to be paid.
In Charan Singh v. Healing Touch Hospital and Others, reported in (2000) 7
SCC 668, this Court held as follows:
“12. ….. Indeed, calculation of damages depends on the facts and
circumstances of each case. No hard and fast rule can be laid down for
universal application. While awarding compensation, a Consumer Forum has to
take into account all relevant factors and assess compensation on the basis
of accepted legal principles, on moderation. It is for the Consumer Forum
to grant compensation to the extent it finds it reasonable, fair and proper
in the facts and circumstances of a given case according to the established
judicial standards where the claimant is able to establish his charge.”
In Ghaziabad Development Authority v. Balbir Singh, reported in
(2004) 4 SCC 65, this Court was considering the compensation to be awarded
to the consumers in cases of deficiency of service by Development
Authorities like the Appellant herein and Ghaziabad Development Authority.
Considering a situation similar to the one that arises in the instant case,
it was held as follows:
“9. That compensation cannot be uniform and can best be illustrated by
considering cases where possession is being directed to be delivered and
cases where only monies are directed to be returned. In cases where
possession is being directed to be delivered the compensation for
harassment will necessarily have to be less because in a way that party is
being compensated by increase in the value of the property he is getting.
*** *** ***
11. Further, in cases where the Commission/Forum has directed delivery of
possession, the party has to a certain extent already got a benefit. The
cost of the land/flat would have gone up in the meantime. Of course, even
in cases, where delivery of possession has been directed there could be
compensation for the harassment/ loss. But such compensation has to be
worked out after looking into the facts of each case and after determining
what is the amount of harassment/loss which has been caused to the
consumer.”
It is undisputed that the Appellant handed over the plot to the Respondent
only in the year 2000 instead of 1989. The Respondent had paid
Rs.1,22,400/- towards the cost of the plot at the rates prevailing in the
year of allotment i.e. 1986. There is no dispute that the Respondent was
paid Rs.1,28,188/- towards interest awarded by the State Commission. There
is also no dispute about the fact that the Respondent did not commence
construction till 2006. The State Commission while awarding the
compensation of Rs. 15 lakhs towards escalation in the cost of construction
commented on the conduct of the Respondent in delaying the construction
only with a view to claim higher compensation.
The point that falls for our consideration in this case is whether the
State Commission was justified in awarding Rs. 15 lakhs towards the
escalation in the cost of construction as compensation. We are of the view
that the Respondent is not entitled to such compensation awarded by the
State Commission and confirmed by the National Commission. The Respondent
suffered an injury due to the delay in handing over the possession as there
was definitely escalation in the cost of construction. At the same time the
Respondent has surely benefited by the increase in the cost of plot between
1989 to 2000. In our opinion, the order of the State Commission is
vitiated for non application of mind to a vital and relevant factor and
hence, suffers from the vice of unreasonableness. The State Commission
criticized the conduct of the Respondent in intentionally delaying the
construction for 6 years but still proceeded to award compensation. In
the facts and circumstances of this case, we are of the opinion that award
of interest would have been sufficient to compensate the Respondent for the
loss suffered by him due to the delay in handing over the possession of the
plot. The compensation of Rs. 15 lakhs awarded by the State Commission is
excessive. As we have not reversed the impugned order on any other ground,
it is not necessary for us to delve into other points that were urged by
the Respondent.
For the aforementioned reasons, the Order of the State Commission dated
05.07.2007 as confirmed by the National Commission is set aside and the
Appeal is allowed. No costs.
.…............................CJI
[T. S. THAKUR]
.........................................J
[DR. D. Y. CHANDRACHUD]
................................J
[L. NAGESWARA RAO]
New Delhi,
December 8, 2016
