COMMISSIONER, RAJASTHAN HOUSING BOARD AND OTHERS versus HIRALAL CHANDA on 11 December 2021

586

SUPREME COURT REPORTS

[2021] 12 S.C.R.

ACOMMISSIONER, RAJASTHAN HOUSING BOARDAND OTHERS

v.

HIRALAL CHANDA

(Civil Appeal Nos 7651-7652 of 2021)

B

DECEMBER 11, 2021

[DR. DHANANJAYA Y CHANDRACHUD ANDA. S. BOPANNA, JJ.]

Consumer Protection Act, 1986: s.24-A – Appellant-HousingCBoard launched a scheme for allotment of house on hire purchasemode of payment – Respondent submitted the application on23.2.1985 and deposited a registration amount of Rs.5000/- – On3.9.1993, appellant issued reservation-cum-demand letterdemanding seed money to be deposited in three instalments for theallotment of house under the scheme – Respondent alleged that theDsaid letter was addressed at an earlier location which he had leftwhile appellant stated that the said place was the one notified to itby respondent – On 15.4.1999, appellant issued letter requiringthe production of a challan for the deposit of seed money –Respondent sought time for same – On 29.07.1999, respondent was Eagain called upon to produce proof of deposit – Eventually on29.05.2000, registration of respondent was cancelled on accountof failure to deposit seed money – Respondent was also asked tocomply with formalities to effectuate refund of Rs.5000/- – On6.8.2009, Housing Board took policy decision to restore registration where same were cancelled due to administrative mistake of BoardFif application for restoration is filed within one year from the dateof cancellation of registration – Eventually, respondent applied forrestoration on 2.8.2010 which was followed by a notice of demand– Respondent filed consumer complaint complaining deficiency ofservice and challenging cancellation of allotment – District ForumGheld in favour of respondent and directed the appellant to allot therespondent a house within six months at the rate which was applicableon the date when it was allotted to the next junior applicant – StateCommission and National Commission confirmed the decision ofDistrict Forum – Hence instant appeal – Held: s.24A of the Act1986 provides the period of limitation for filing a complaint – AH586

period of two years has been provided for filing a complaint fromthe date on which the cause of action arose – In the present case,the cancellation took place on 29.5.2000 which was preceded by aletter of the respondent dated 3.5.1999 by which he had expresslystated that he would be making a deposit within one and a halfmonths – Even after the cancellation, there was no challenge to thecancellation of the allotment – The cause of action became barredby time much prior to office order dated 6.8.2009 – The NationalCommission erred in holding that the cause of action arose on theissuance of office order dated 6.8.2009 because even on its plainterms, the policy decision would not revive the registration of theappellant which was cancelled due to his own default – DistrictForum failed to notice that the respondent had received both theletter dated 15.4.1999 as well as the letter of cancellation of29.5.2000 – Moreover, letter dated 15.4.1999 contained a clearreference to the earlier letter of the Housing Board of 1993 – Itwould be far-fetched to assume that while the respondent hadreceived several letters from the Housing Board, he had not receivedthe letter demanding the seed money in the first place – In conclusion,besides the delay on the part of the respondent in espousing hisrights to challenge the cancellation of the allotment, the case didnot clearly fall within the ambit of the policy decision which wastaken on 6.8.2009.

Disposing of the appeals, the Court

Conclusion

Disposing of the appeals, the Court

HELD: 1. No formal allotment was ever made to therespondent and upon the deposit of the initial amount towardsregistration, his name was registered under the Scheme.According to the appellant, a letter was addressed to therespondent on 3 September 1993 requiring the deposit of seedmoney or an advance in three installments under the Scheme.The respondent disputes the receipt of the letter and the DistrictForum primarily held in his favour on the ground that the appellantought to have produced proof of receipt, which was not done.The important circumstance, which has a bearing on the case,however, is that thereafter, the appellant communicated to therespondent on 15 April 1999 requiring him to produce proof ofdeposit of the seed money in terms of the earlier letter of 3September 1993. There was a clear reference to the earlier letter ABC

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Adated 3 September 1993. The respondent is an advocate and thiswas a fact which would not miss the attention of a legally trainedperson. In his response, which was dated 3 May 1999, therespondent did not deny receipt of the earlier letter dated 3September 1993. By his reply, the respondent sought a time ofone and a half months to deposit the amount. The respondent,Bhowever, admittedly did not make any deposit of the amount whichwas required until eventually the registration was cancelled on29 May 2000. The respondent was in receipt of the letter ofcancellation which is admitted in terms of his letter dated 12December 2008 to the Estate Manager of the Housing BoardCand, subsequently, on 2 August 2010 to the Commissioner, UrbanDevelopment. Even after the cancellation of the allotment, therespondent took no steps to pursue his remedies under theConsumer Protection Act 1986. The respondent was evidentlypersuaded to take recourse to his legal remedies in 2011 becausea policy decision was taken by the Housing Board on 6 AugustD2009 in terms of which, it was stipulated that where a registration/allotment had been cancelled due to an administrative mistakeof the Housing Board, it would be restored if the application isfiled within one year from the date of cancellation. On the otherhand, cases where there was no administrative fault on the partEof the Housing Board, would not be restored. [Para 8][592-C-H;593-A-B]2. Section 24A of the Consumer Protection Act 1986provides the period of limitation for filing a complaint. A periodof two years has been provided for filing a complaint from theFdate on which the cause of action arose. In the present case, thecancellation took place on 29 May 2000 which was preceded by aletter of the respondent dated 3 May 1999 by which he hadexpressly stated that he would be making a deposit within oneand a half months. Even after the cancellation, there was nochallenge to the cancellation of the allotment. The cause of actionGbecame barred by time much prior to the policy decision dated 6August 2009. The NCRC erred in holding that the cause of actionarose on the issuance of the office order dated 6 August 2009because even on its plain terms, the policy decision would notrevive the registration of the appellant which was cancelled dueHto his own default. [Para 9][593-B, E; 594-D-F]

3. In this backdrop, the basis on which the District Forumallowed the complaint was clearly erroneous. The District Forumfailed to notice that the respondent had received both the letterdated 15 April 1999 as well as the letter of cancellation of 29 May2000. Moreover, as we have noted earlier, the letter dated 15April 1999 contained a clear reference to the earlier letter of theHousing Board of 1993. It would be far-fetched to assume thatwhile the respondent had received several letters from theHousing Board, he had not received the letter demanding theseed money in the first place. In conclusion, besides the delayon the part of the respondent in espousing his rights to challengethe cancellation of the allotment, the case did not clearly fall withinthe ambit of the policy decision which was taken on 6 August2009. [Paras 10, 11][594-F-H; 595-A]

State Bank of India v. BS Agricultural Industries (2009)5 SCC 121 : [2009] 4 SCR 762; HUDA v. TejRefrigeration Industries Ltd. (2013) 14 SCC 758 –relied on.

Chief Administrator PUDA and Ors. v. Shabnam Virk(2006) 4 SCC 74 : [2006] 3 SCR 221 – referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7651-7652 of 2021.

From the Judgment and Order dated 04.10.2018 of the NationalConsumer Dispute Redressal Commission in Revision Petition No. 613-614 of 2017.

N.K. Chauhan, Praveen Swarup, Advs. for the Appellants.

Satyavikram, Ms. Lekha G.V., Advs. for the Respondent.

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AThe Judgment of the Court was delivered byDR. DHANANJAYA Y CHANDRACHUD, J.

1. Leave granted.

2. These appeals arise from a judgment of the National ConsumerBDisputes Redressal Commission[1] dated 4 October 2018. The NCDRCdismissed the revision petitions seeking to challenge the judgment of theState Consumer Disputes Redressal Commission, Rajasthan[2] which inturn had affirmed the decision of the District Consumer DisputesRedressal Forum – Second, Jaipur[3].

C3. The appellant launched a General Registration Scheme[4] in 1985in pursuance of which the respondent submitted an application on 23February 1985 for allotment of a Middle Income Group ‘B’ Categoryhouse in Jodhpur on a hire-purchase mode of payment, after depositinga registration amount of Rs 5,000. On 31 May 1985, the appellant issueda letter of confirmation acknowledging receipt of payment and confirmingDthe registration of the respondent under the Scheme. According to theappellant, a reservation-cum demand letter was issued to the respondenton 3 September 1993, demanding seed money, which was to be depositedin three installments for the allotment of a house under the Scheme. Therespondent disputes receipt of the letter on the ground that it wasaddressed to him at an earlier location which he had left. On the otherEhand, the case of the appellant is that the letter was addressed to therespondent at the place which was notified to the Housing Board. Bethat as it may, on 15 April 1999, the appellant issued a communication tothe respondent requiring the production of a challan for the deposit ofthe seed money in terms of the letter dated 3 September 1993. There isFno dispute about the receipt of this letter since the respondent submitteda reply on 3 May 1999 by which he sought time of a month and a half todeposit the seed money. The case of the appellant is that on 26 July1999, the respondent was once again called upon to produce proof ofdeposit.G4. Eventually, on 29 May 2000, the registration of the respondentwas cancelled on the ground that he had failed to deposit the seed moneyor advance amount to obtain an allotment. By the letter dated 29 May 1 “NCDRC”

2 “SCDRC”

3 “District Forum”

H4 “Scheme”

1 “NCDRC”

2 “SCDRC”

3 “District Forum”

H4 “Scheme”

2000, the respondent was requested to comply with certain formalitiesto effectuate the refund of Rs 5,000. There is no dispute about the factthat the letter of cancellation was received by the respondent, this beingin terms admitted by the respondent in his subsequent letters dated 12December 2008 (Annexure P-8) to the Estate Manager of the HousingBoard and again by his letter dated 2 August 2010 (Annexure P-10) tothe Commissioner, Urban Development.

5. The Housing Board took a policy decision on 6 August 2009 inthe following terms:

“OFFICE ORDER

Subject: -Restoration of the registration/allotment aftercancellation.

As per the meeting no. 207 dated 16.07.2009 organized by theDirector of Board, the decision was taken under point no. 207.15that all the earlier orders passed for cancellation of Registration/Allotment by the Board are quashed. The cases where theRegistration/allotment are canceled due to administrative mistakeof Board, in those cases if the application is filed within one yearfrom the date of cancellation of registration/allotment theRegistration/allotment will be restored only on approval from theboard and the cases where there is no administrative fault on thepart of Board, such Registration/allotment will not be restored .”

6. Following the above decision, the respondent applied forrestoration of his registration on 2 August 2010, which was followed bya notice of demand on 18 January 2011. Eventually, on 14 February2011, the respondent instituted a consumer complaint before the DistrictForum complaining of a deficiency of service and challenging the orderof cancellation of allotment. The District Forum by its order dated 11December 2012, directed the appellant to restore the registration and toallot the respondent a house within six months at the rate which wasapplicable on the date when it was allotted to the next junior applicant.The order of the District Forum was confirmed in appeal by the SCDRCon 28 November 2016. The revision has been dismissed by the NCDRCon 4 October 2018.

7. We have heard Mr N K Chauhan, learned counsel for theappellant and Mr Satyavikram, learned counsel for the respondent.

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A8. The primary issue which requires to be considered is whetherthere was, in fact, any default on the part of the appellant or converselywhether it was the respondent who was in breach of his obligations as aprospective allottee. In Chief Administrator PUDA and Ors. v.Shabnam Virk[5], this Court discussed the binding effect of the termsand conditions of allotment on the consumer. This Court held that theBconsumer is bound to pay the increased price of the allotted house sincethe terms of the allotment specified that the price declared earlier is atentative assessment and is subject to revision. Thus, the appellant isentitled to cancel the allotment if the respondent has failed to fulfil theconditions of the allotment. At this stage, it is material to note that noCformal allotment was ever made to the respondent and upon the depositof the initial amount towards registration, his name was registered underthe Scheme. According to the appellant, a letter was addressed to therespondent on 3 September 1993 requiring the deposit of seed money oran advance in three installments under the Scheme. The respondentdisputes the receipt of the letter and the District Forum primarily held inDhis favour on the ground that the appellant ought to have produced proofof receipt, which was not done. The important circumstance, which hasa bearing on the case, however, is that thereafter, the appellantcommunicated to the respondent on 15 April 1999 requiring him toproduce proof of deposit of the seed money in terms of the earlier letterEof 3 September 1993. There was a clear reference to the earlier letterdated 3 September 1993. The respondent is an advocate and this was afact which would not miss the attention of a legally trained person. In hisresponse, which was dated 3 May 1999, the respondent did not denyreceipt of the earlier letter dated 3 September 1993. By his reply, therespondent sought a time of one and a half months to deposit the amount.FThe respondent however admittedly did not make any deposit of theamount which was required until eventually the registration was cancelledon 29 May 2000. The respondent was in receipt of the letter ofcancellation which is admitted in terms of his letter dated 12 December2008 to the Estate Manager of the Housing Board and, subsequently, onG2 August 2010 to the Commissioner, Urban Development. Even afterthe cancellation of the allotment, the respondent took no steps to pursuehis remedies under the Consumer Protection Act 1986. The respondentwas evidently persuaded to take recourse to his legal remedies in 2011because a policy decision was taken by the Housing Board on 6 August 2009 in terms of which, it was stipulated that where a registration/allotment had been cancelled due to an administrative mistake of theHousing Board, it would be restored if the application is filed within oneyear from the date of cancellation. On the other hand, cases wherethere was no administrative fault on the part of the Housing Board,would not be restored.

9. Section 24A of the Consumer Protection Act 1986 provides theperiod of limitation for filing a complaint. The provision reads thus:

“24A.Limitation period

(1) The District Forum, the State Commission or the NationalCommission shall not admit a complaint unless it is filed withintwo years from the date on which the cause of action has arisen.

(2) Notwithstanding anything contained in sub-section (1), acomplaint may be entertained after the period specified section-section (1), if the complainant satisfies the District Forum, theState Commission or the National Commission, as the case maybe, that he had sufficient cause for not filing the complaint withinsuch period.

Provided that no such complaint shall be entertained unless theNational Commission, the State Commission or the District Forum,as the case may be, records its reasons for condoning such delay.”

A period of two years has been provided for filing a complaintfrom the date on which the cause of action arose. In State Bank ofIndia v. BS Agricultural Industries[6], this Court observed that thelimitation prescribed under Section 24A is a legislative mandate. If theconsumer forum adjudicates upon a complaint on merits, which is barredby time, such an order would be liable to be set aside on grounds ofillegality. In HUDA v. Tej Refrigeration Industries Ltd.[7], this Courtreiterated that the consumer forums should comply with the mandate ofSection 24A. This Court observed thus:

“11. A reading of Sections 12 and 24-A makes it clear that acomplaint filed after expiry of two years counted from the date ofaccrual of cause of action cannot be admitted by any consumerforum unless the complainant is able to show that he had sufficient 6 (2009) 5 SCC 121

7 (2013) 14 SCC 758

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Acause for not filing the complaint within the prescribed period andthe forum concerned records reasons for condoning the delay.The embargo contained in Section 24-A against admission of acomplaint is unambiguous and if that section is read in conjunctionwith Section 12, which prescribes the procedure for entertainingthe complaint, it becomes clear that before admitting a complaintBand issuing process, the consumer forum must feel convincedthat the same has been filed within the period of limitation or thatthe complainant has succeeded in showing sufficient cause fordelayed filing of the complaint. Unfortunately, most of theconsumer forums in the country do not follow the provisions ofCSection 12 read with Section 24-A and a large number ofcomplaints are entertained without considering the issue oflimitation. This results in overburdening of the dockets of consumerforums and consequential delay in the disposal of other deservingcases.”

DIn the present case, the cancellation took place on 29 May 2000which was preceded by a letter of the respondent dated 3 May 1999 bywhich he had expressly stated that he would be making a deposit withinone and a half months. Even after the cancellation, there was no challengeto the cancellation of the allotment. The cause of action became barredby time much prior to the policy decision dated 6 August 2009. TheENCRC erred in holding that the cause of action arose on the issuance ofthe office order dated 6 August 2009 because even on its plain terms,the policy decision would not revive the registration of the appellantwhich was cancelled due to his own default.

10. In this backdrop, the basis on which the District Forum allowedFthe complaint was clearly erroneous. The District Forum failed to noticethat the respondent had received both the letter dated 15 April 1999 aswell as the letter of cancellation of 29 May 2000. Moreover, as we havenoted earlier, the letter dated 15 April 1999 contained a clear referenceto the earlier letter of the Housing Board of 1993. It would be far-fetchedGto assume that while the respondent had received several letters fromthe Housing Board, he had not received the letter demanding the seedmoney in the first place.

11. In conclusion, besides the delay on the part of the respondentin espousing his rights to challenge the cancellation of the allotment, the H

case did not clearly fall within the ambit of the policy decision whichwas taken on 6 August 2009.

12. At this stage, we may also note that the Housing Board whichis in appeal has stated before the Court that it would be ready and willingto make an allotment to the respondent but not at the rate which wasprevalent when (as directed by the District Forum) a person immediatelyjunior to him in order of registration was made an allotment. Therespondent has himself been guilty of default and, therefore, such adirection to allot at a rate prevalent in the past would not be correct.Therefore, we record the statement of the Housing Board that shouldthe respondent be ready and willing at the present point of time, hewould be given an alternate allotment but in accordance with the ratesprevailing on the date of allotment. In the event that the respondent isnot willing to accept the alternate allotment at the present rate, it hasbeen stated on behalf of the appellant that the registration money whichhas been deposited would be duly refunded to the respondent inaccordance with the policy of the Housing Board.

13. Subject to the recording of the above statement, which hasbeen made on behalf of the Housing Board, we allow the appeals andset aside the impugned judgment and order of the NCDRC dated 4October 2018 in Revision Petition Nos 613-614 of 2017.

14. The appeals shall stand disposed of in the above terms.

15. Pending applications, if any, stand disposed of.

Devika Gujral

Appeals disposed of.

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