The Supreme Court on Thursday disposed of several connected appeals, while directing the Chandigarh Administration to decide the claim of conversion of allottees as on the date when consumer complaints were filed.
A bench comprising Justices Hemant Gupta and A.S. Bopanna, while directing the Chandigarh Administration, opined
“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 forum 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.”
According to the order, the National Consumer Disputes Redressal Commission (NCDRC) had dismissed the revision petition filed by the Estate Officer And Anr, the appellant against an order passed by the State Consumer Disputes Redressal Commission, affirming the order of the District Consumer Disputes Redressal Forum.
Respondent Charanjit Kaur had sought conversion of a plot situated at Chandigarh, from leasehold to freehold site on acceptance of the requisite conversion fee.
The District Forum directed the appellant to convert the said plot in question from leasehold to freehold site on acceptance of requisite conversion fee; to pay an amount of Rs 10,000 as compensation for mental agony and physical harassment; and to pay Rs 5,000 as costs of litigation.
The order was passed by NCDRC, while relying upon the order passed in Charanjit Kaur. The respondent was allotted a site under Chandigarh Milk Colony Allotment of Site Rules, 1975, (Rules 1975) measuring 143 sq. yards on a leasehold basis for a period of 30 years for the purposes of cowshed cum dairy. The Chandigarh Conversion of Residential Leasehold Land Tenure into Freehold Land Tenure Rules, 1996 were extended to the sites allotted under the 1975 Rules.
The lease period of 30 years was extended by four years, so that the 1996 Rules could be made applicable. The request of the respondent for conversion of leasehold to freehold was not accepted, which led to filing of a complaint before the District Forum. The Forum passed an order on the same lines as in Charanjit Kaur. The NCDRC also dismissed the revision filed by the appellant.
Some of the statutory provisions need to be reproduced before examining the respective contentions of the parties. Section 3 of the Capital of Punjab (Development and Regulation) Act, 19527 reads as:-
“3. Power of Central Government in respect of transfer of land and building in Chandigarh. – (1) [Subject to the provisions of this section, the Central Government may] sell, lease or otherwise transfer, whether by auction, allotment or otherwise, any land or building belonging to the Government in Chandigarh on such terms and conditions as it may subject to any rules that may be made under this Act, think fit to impose.
(2) The consideration money for any transfer under subsection (1) shall be paid to the [Central Government] in such manner and in such instalments and at such rate of interest as may be prescribed.
(3) Notwithstanding anything contained in any other law for the time being in force, until the entire consideration money together with interest or any other amount, if any, due to the Central Government on account of the transfer of any site or building, or both, under sub-action (12) is paid, such site or building, or both, as the case may be, shall continue to belong to the Central Government.”
“The grievance of the allottees was that conversion was allowed on pick and choose basis rather than on the basis of either the date of receipt of the application or the date of decision.”
“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.”
-the bench noted , while referring to Amritpal Singh v. Chandigarh Administration and Dheera Singh v. U.T. Chandigarh Admn. and Ors,
Ankit Goel, counsel for the appellant argued that the title of leasehold property vests with the Central Government in terms of Section 3 of the Act and the Rules framed thereunder. The Central Government had granted lease of residential plots for a period of 99 years under the 1973 Rules.
“the findings recorded by the NCDRC 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. Such conversion fee was in fact part of the sale consideration to confer complete title to an allottee.”
-Argued the counsel
It was also argued that the reliance on the judgment in M.K. Gupta was clearly erroneous inasmuch as that was a case wherein the allotment of flats was considered to be “service” within the meaning of Section 2(o) of the Consumer Protection Act, 1986.
The Apex Court is of the view “ 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, we direct the Administration to decide the claim of conversion as on the date when consumer complaints were filed. Such action shall be taken within 3 months”
The Court observed” 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. It is a typical case of ‘you show me face, I will show the Rule’. 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.”
The Apex Court noted “The difficult and near impossible procedure leads to arbitrary and discriminatory action by the officials of the Estate Office.” and directed “Administration 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 2007 Rules.”
The matter is listed after four months.
In the present case, the allotment of residential sites on lease hold basis for 99 years is not in issue. It has not come on record as to whether such sites were allotted in an auction or by inviting applications.
The respondents had paid the premium amount, 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 Act.
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 1996 Rules, which is part of the sale consideration.
Thus, a case of sale of immovable property on 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.