Home » Landmarks » S P Dhavaskar Vs. Housing Commissioner Karnataka Housing Board

Decided on September 27,1995
S.P.DHAVASKAR …Appellant



( 1 ) THIS order will dispose of both the above titled appeals as they arise out of the same passed by State Consumer Disputes Redressal Commission, Karnataka at Bangalore in Complaint No. 70/92. The said complaint was filed by Mr. S. P. Dhavaskar (appellant in F. A. No. 203 and respondent in F. A. No. 342 and hereinafter referred to as complainant) against Housing Commissioner, Karnataka Housing Board, (respondent in F. A. No. 203 and appellant in F. A. No. 342 and hereinafter referred to as the opposite party ). The case of the complainant before the State Commission was that pursuant to an advertisement issued by the opposite party for allotment of houses under HUDCO scheme he applied for allotment of a house by depositing a sum of Rs. 5,000/- on 10th April, 1987. The opposite party allotted House No. MIG-42, Yelahanka, Bangalore in favour of the complainant on 20th February, 1990. The complainant as per the instructions contained in the allotment letter deposited Rs. 80,000/- in four installment of Rs. 20,000/- each on 19th April, 1990. 17th May, 1990, 20th June, 1990 and 21st July, 1990. The complainant further made a deposit of Rs. 81, 000/- on 25th September, 1990. Thus in all he paid a sum of Rs. 1,66,000/ -.

( 2 ) THE complainant next averred that as per the advertisement issued by the opposite party, the construction of the houses was to be completed within two years from 3rd March, 1987 but the opposite party did not deliver the possession of the allotted house during that period in spite of repeated reminders. The complainant received an intimation on 21st March, 1992 stating that the construction of the houses was not upto the expected level because of the use of low cost technology and so they have developed distress and might not last long and so the opposite party was unable to hand over the possession of the allotted house to the complainant. The opposite party further intimated the complainant and other allottees either to take refund of the amounts already deposited without interest or opt for allotment of new house (ground plus two floor tenements) in lieu of the houses already allotted and agreeing to bear difference in cost. According to the complainant the service rendered by the opposite party is deficient in not delivering possession of a properly constructed house. He claimed compensation in the sum of Rs. 4,65,080/- on various counts including refund of Rs. 1,66,000/ -.

( 3 ) THE case of the opposite party as appears from memorandum filed in First Appeal No. 342, the Karnataka Housing Board (for short the Board) formulated a composite housing scheme of constructing 707 houses adopting a new technology by using soil stablished mud blocks to popularise the low cost technology. Such houses were constructed and one house was allotted to the complainant. However, during the month of September and November, 1991 due to heavy rains in Bangalore it was noticed that the soil stablished mud blocks used for superstructure have shown signs of distress and in the circumstances a three member committee was appointed for inspection and giving report. Thereafter, the Board tentatively decided to give alternative houses or refund the deposits to the allottees without interest as per the Karnataka Housing Board Rules and Regulations. As already noticed above the allotment of new house (ground plus two floor tenements) in lieu of the house already allotted was to be made to the allottee who agreed to bear the difference in the cost.

( 4 ) IT appears that instead of giving his option to the Board, the complainant filed complaint before the State Commission for the relief mentioned above. The State Commission held that the opposite party had collected huge funds of money from the complainant and after lapse of nearly two years the construction was found not upto the mark and the option given to the allottee to take refund of the money deposited without interest was clearly unreasonable and it is a clear case of deficiency in service. The State Commission directed the opposite party to refund the sum of Rs. 1,66,000/- with interest at 18% from the respective date of deposits upto the date of payment. The complainant was not granted any compensation for mental agony, loss etc.

( 5 ) AS noticed above the complainant has filed First Appeal No. 203/93 while the opposite party has filed First Appeal No. 342/93. The complainant in his appeal has prayed for compensation loss and damages for mental agony. According to the complainant, he was staying in rented house and had paid Rs. 600/- per month as rent for a period of four years i. e. from March, 1989 to March, 1992 and also obtained loan of Rs. 1,23,000/- from H. D. F. C. at 14% interest and another sum of Rs. 43,000/- from outside agencies at 24% interest per annum.

( 6 ) THE case of the appellant in Appeal No. 342/93 is that no interest can be allowed on the deposits made by the allottee. It is also pleaded that transaction in question is a contractual obligation and enforcement of such contract or otherwise cannot be entertained by consumer forums constituted under Consumer Protection Act, 1986.

( 7 ) BEFORE proceeding further we may mention here that Appeal No. 203 has been filed after a delay of 13 days while Appeal No. 342/93 has been filed with 8 days delay. In both the cases application for condonation of delay has been filed. Considering the grounds mentioned in these applications and also taking into consideration that delay is of only a few days we condone the delay in both the appeals.

( 8 ) FIRST we take up F. A. No. 342/93 filed by the opposite party. The contention of the appellant in that appeal is that for a constituted under the Consumer Protection Act have no jurisdiction to dispose of such complaints and have to be rejected outrightly. However, this Commission held in (U. P. Avas Evam Vikas Pradhikaran v. Garima Shukla and others) that where the Housing and Development Boards are engaged in serving the public in the matter of providing houses, acquisition of land, development of sites, construction of houses thereon and allotment of plots/houses to the public for consideration are rendering service to the public. This view has been upheld by the Supreme Court in Civil Appeal No. 6237 of 1990 titled (Lucknow Development Authority v. M. K. Gupta) by that order the Supreme Court disposed of some other similar Appeals. Hence, the above objection of the opposite party is overruled.

( 9 ) THE other ground taken in that appeal is that under the Karnataka Housing Board Rules and Regulations allottees are not entitled to interest on deposits. As noticed earlier, the State Commission has held that the opposite party is guilty of deficiency in service as huge sums of money has been collected from the complainant and after lapse of nearly two years, he was informed that the construction of the house was not upto the mark and advised the complainant to take refund of the money deposited without interest or to opt for an alternative flat and agree to pay the difference in the price. The Boards stand is totally unreasonable. Before taking up the construction of the superstructure of the houses with soil stabilised mud blocks the Board ought to have seen whether such houses could withstand the heavy rains. When the Board found that the houses are not upto the mark it offered to the allottee to opt for an alternative house at the increased price or to take refund without interest. The said offer was not in any way a reasonable concession granted to the allottee. A person who has deposited huge sums cannot be asked to take back the refund after two years without interest or to opt for alternative house at increased price which might be beyond his financial capacity. Thus we uphold the finding of the State Commission that the Board has been gross negligent in rendering service and that it was justified in awarding interest to the complainant who had borrowed money from H. D. F. C. and other agencies on interest for depositing with the Board in the hope that habitable house would be allotted to him after a reasonable time. Hence First Appeal No. 342/93 is liable to be dismissed.

( 10 ) NOW we take up First Appeal No. 203/93. The complaint was filed by the complainant in 1992. Upto that time the amount deposited with the Board, was not refunded to him. The argument that the complainant had not given his option asked for vide letter dated 21st March, 1992 has no force. If the complainant has not given his option for the alternative house, the amount ought to have been refunded to him. During all these years the complainant must have suffered mental agony as huge amount borrowed by him from different agencies was lying blocked with the Board and he was not getting any benefit from the deposits. It is common knowledge that the prices of real estate are rising day by day. The complainant cannot now get a house at the amount deposited by him. Considering all these facts we think that the complainant is entitled to some compensation in respect of the various items pleaded in the complaint. We assess the compensation at Rs. 25,000/ -.

( 11 ) FOR the reasons given above First Appeal No. 342/94 is dismissed with costs which we assess at Rs. 1,000/ -. First Appeal No. 203/93 is partly allowed. While maintaining the order of the State Commission we further direct that the opposite party will pay Rs. 25,000/- to the complainant within two months from the date of receipt of the order failing which the said amount will also carry interest at the rate of 18% per annum from the date of this order till realisation. In First Appeal No. 203/93 we leave the parties to bear their own costs. Order accordingly.

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