Consumer Protection Act, 1986 – s.2(1)(o) and s.14(1)(e) – Chandigarh Conversion of Residential Leasehold Land Tenure into Freehold Land Tenure Rules, 1996 – Respondent-complainant sought conversion of a plot allotted by Chandigarh administration from leasehold to freehold site – District Consumer Forum directed appellant-Estate Officer to convert the plot on acceptance of requisite conversion fee; to pay compensation; and also costs of litigation – Order affirmed by State and National Consumer Commissions – Plea of appellant-Estate Officer that the findings recorded by National Commission that the respondents are consumers as charges have been paid for conversion, are not tenable for the reason that the charges deposited were not for any services to be rendered but to grant complete title to the allottees – It was contended that such conversion fee was in fact part of the sale consideration to confer complete title to an allottee – Held: The appellant is not charging any fee for conversion of leasehold property into freehold property except the amount in accordance with the 1996 Rules – The amount so fixed under the Rules would form part of the sale consideration and not a fee or charge levied for providing any kind of service – Appellant is not providing any services within the meaning of s.2(1)(o) of the Consumer Act – The expression ‘service’ includes housing construction and not allotment of a site or a plot – Since the respondents are already in possession of the sites as lessee on 99 years basis, it cannot be said that the appellant was deficient in providing any service, which even if used in a liberal sense would not include transfer of title in an immovable property – Thus, the consumer fora under the Act would not have jurisdiction to entertain the consumer complaints on the ground of deficiency in service related to transfer of title of the immovable property – Though it is not a case of the deficiency in service as contemplated by Consumer Act but, on facts, in exercise of power under Art.142 of the Constitution, various directions issued to the Chandigarh Administration including direction to decide the claim of conversion as on the date when consumer complaints were filed – Chandigarh Lease Hold of Sites and Building Rules, 1973 – Chandigarh Estate Rules, 2007 – Constitution of India, 1950 – Art. 142.
Administrative Law – Administrative process – Office Notings – Held: A noting is a part of the decision-making process – Such noting does not fructify into an order unless the same is communicated to the affected person.
Disposing of the appeals, the Court
HELD:1. The respondents claim conversion of lease hold sites to free hold sites on payment of the charges fixed by the Chandigarh Administration. Such conversion was sought in view of the fact that as against the limited right in the lease property for 99 years, the Administration decided to grant freehold rights on satisfaction of certain conditions mentioned in the Chandigarh Conversion of Residential Leasehold Land Tenure into Freehold Land Tenure Rules, 1996. The respondents had paid the premium amount as fixed under the Chandigarh Lease Hold of Sites and Building Rules, 1973. Now, the claim is for purchase of remaining rights of the Central Government to convert the site into freehold. The Central Government continues to be owner of the land until the entire consideration money together with interest or any other amount is paid to the Central Government on account of transfer of any site or building or both as provided in Section 3 of the Capital of Punjab (Development and Regulation) Act, 1952. Therefore, the owner i.e., the Central Government, cannot be said to be a trader or a service provider. The appellant is not charging any fee for conversion of leasehold property into freehold property except the amount in accordance with the Chandigarh Conversion of Residential Leasehold Land Tenure into Freehold Land Tenure Rules, 1996, which is part of the sale consideration. It is thus a case of sale of immovable property on the terms as were fixed in the 1996 Rules. The amount so fixed under the Rules would form part of the sale consideration and not a fee or charge levied for providing any kind of service. [Para 18][137-B-F]
2. In terms of Section 14(1)(e) of the Consumer Protection Act, 1986, the District Forum can inter-alia direct removal of deficiency in the services. The deficiency in service however does not include the transfer of title in favour of the allottee who was earlier granted leasehold rights. The appellant is not providing any services within the meaning of Section 2(1)(o) of the Consumer Act. The expression ‘service’ includes housing construction and not allotment of a site or a plot. [Para 19][137G]
3.1. The Consumer fora had taken into consideration a noting in the administrative file of the appellant. A noting is however a part of the decision-making process. Such noting does not fructify into an order unless the same is communicated to the affected person. Therefore, the noting by itself cannot be pressed into service to return a finding of deficiency in service. However, the fact remains that in terms of 1996 Rules, an amount of Rs.1710/- per sq.mt. was fixed as conversion charges. The land rates were to be fixed by the Administration from time to time under Rule 5 of 1996 Rules. The rates were revised only in 2017. The request could not be kept pending when the statutory Rules were in force. The executive authority could not by an administrative order keep the matter pending, when there was no other reason not to accept the conversion except impending increase in the conversion charges. The action of the appellant in rejecting the request for conversion is arbitrary and discriminatory. [Paras 20, 21][137-H; 138-A; 139-F-G]
3.2. On the date when the letter was issued by the administration on 10.05.2013, the statutory 1996 Rules were in force. Such Rules were kept in abeyance on the basis of communication on behalf of the Finance Secretary to the Estate Officer. Such communication cannot be countenanced. The statutory rules could not be put to hold because the issue of revision of rates of conversion was under consideration of the Administration. Even after the said letter the rates were fixed only in 2017. In the face of valid statutory Rules, an administrative decision cannot be sustained. [Para 23][140-CD]
4. Since the respondents are already in possession of the sites as lessee on 99 years basis, it cannot be said that the appellant was deficient in providing any service, which even if used in a liberal sense would not include transfer of title in an immovable property. Thus, the consumer fora under the Act would not have jurisdiction to entertain the consumer complaints on the ground of deficiency in service related to transfer of title of the immovable property. [Para 24][140-E]
5. Though it is not a case of the deficiency in service as contemplated by Consumer Act but definitely a case of exercise of jurisdiction in an arbitrary and discriminatory manner. In exercise of the power conferred on this Court under Article 142, the Chandigarh Administration is directed to decide the claim of conversion as on the date when consumer complaints were filed. [Para 25][140-F-G]
6.1. The difficulty in the Administration is that the senior officers in the Chandigarh Administration are on deputation from the States of either Punjab or Haryana. The officers revert to their parent cadre after completion of deputation period of approximately three years. However, the officials continue to work at the Estate Office. Though the Administration has done commendable work to maintain the character of Chandigarh as City Beautiful, but the Estate Office has underbelly, that is, the action of the officials cannot be said to be bona fide, as is apparent in the present case. On the other hand, the officers are unable to take decisions which are citizen friendly. Even no attempt is made to remove the bottlenecks in the working of the Estate Office. [Para 26][140-H; 141-A-B]
6.2. Many cases of alleged misuse have been initiated but not concluded by the Estate Office. The residents of Chandigarh are widely harassed while seeking no-objection certificate for sale of leasehold property as the procedure for grant of no-objection certificate and of deposit of unearned increase is interpreted in different manners by the different officials, which the officers of the Administration has failed to control. Another area of concern is the unreasonable procedure adopted by the Administration for affecting mutation after the demise of the leaseholder or the allottee and of completing other formalities at the offices of the appellant. The difficult and near impossible procedure leads to arbitrary and discriminatory action by the officials of the Estate Office. Therefore, the Chandigarh Administration is directed to constitute a Committee which may include a Member of Parliament; an architect; an advocate, who is or has represented Chandigarh Administration before the High Court; two representatives of the Municipal Corporation being representatives of the citizens of Chandigarh, apart from such officers which the Administration may think fit, so as to review and streamline the processes of sanction of mutation, grant of occupancy certificate, no-objection certificate and other citizen-centric requirements including calculation of unearned profit under the 1973 Rules or under Chandigarh Estate Rules, 2007. [Para 29][143-E-H; 144-A-B]
Lucknow Development Authority v. M.K. Gupta (1994)
1 SCC 243 : [1993] 3 Suppl. SCR 615 ; Ghaziabad Development Authority v. Balbir Singh (2004) 5 SCC
65 : [2004] 3 SCR 68 ; Chandigarh Housing Board v. Avtar Singh and Ors. (2010) 10 SCC 194 : [2010]
12 SCR 96 ; UT Chandigarh Administration and
Another v. Amarjeet Singh and Others (2009) 4 SCC
660 : [2009] 4 SCR 541 ; Chandigarh Administration v. Jagjit Singh (1995) 1 SCC 745 : [1995] 1 SCR 126; Amritpal Singh v. Chandigarh Administration 2012 SCC OnLine P&H 9310; Dheera Singh v. U.T.
Chandigarh Admn. and Ors. 2012 SCC Online P&H 21473 – referred to.
Bachhittar Singh v. State of Punjab AIR 1963 SC
395 : [1962] Suppl. SCR 713 – relied on.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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