* THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE NOUSHAD ALI + Writ Petition Nos. W.P.Nos.28246 of 2009, 302, 3947, 5091 of 2010, 26520 of 2009, 360, 364, 405, 429, 304, 305, 339, 356, 357, 5003, 5088, 5121, 5131 and 5903 of 2010 %13-08-2010 #M/s.Narne Constructions Private Limited, Secunderabad. ….petitioner Vs. $ The Union of India, rep. by its Secretary, Ministry of Consumer Affairs, Food & Public Distribution, New Delhi and others. …. Respondents !Counsel for the Petitioner: Sri D.Prakash Reddy and Sri V.L.N.G.K.Murthy, senior counsel for Sri Venkat Reddy Counsel for the Respondents: Sri B.Mayur Reddy for Union of India Sri T.Balaji, Sri G.Rama Gopal, Srinivas Karra and Sri P.Shiv Kumar, for other respondents. <Gist : >Head Note: ? Cases referred: 1. (1994) 1 SCC 243 2. CDJ 2009 SC 555 3. (2007) 6 SCC 711 4. (2004) 5 SCC 65 5. (2005) 9 SCC 449 6. (2000) 6 SCC 113 7. (2003) 2 SCC 412 8. (2004) 1 SCC 305 9. (1996) 6 SCC 385 10.(1998) 4 SCC 39 11.(2007) 4 SCC 579 12.(2008) 10 SCC 345 THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE NOUSHAD ALI Writ Petition Nos. W.P.Nos.28246 of 2009, 302, 3947, 5091 of 2010, 26520 of 2009, 360, 364, 405, 429, 304, 305, 339, 356, 357, 5003, 5088, 5121, 5131 and 5903 of 2010 Date: 13-08-2010 Between: M/s. Narne Constructions Private Limited, Secunderabad. ……….Petitioner And The Union of India, rep. by its Secretary, Ministry of Consumer Affairs, Food & Public Distribution, New Delhi and others. ………Respondents THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE NOUSHAD ALI Writ Petition Nos. W.P.Nos.28246 of 2009, 302, 3947, 5091 of 2010, 26520 of 2009, 360, 364, 405, 429, 304, 305, 339, 356, 357, 5003, 5088, 5121, 5131 and 5903 of 2010 COMMON ORDER : (Per Hon’ble Sri Justice Noushad Ali) In this batch of cases, the petitioner-company seeks a ruling on the threshold jurisdiction of the consumer fora in entertaining consumer disputes as presented by the respondents (complainants) in each of their consumer cases. 2. This batch of 19 cases falls in two categories – W.P.Nos.28246 of 2009, 302 of 2010, 3947 of 2010, 5091 of 2010, 26520 of 2009, 360 of 2010, 364 of 2010, 405 of 2010, 429 of 2010, 304 of 2010, 305 of 2010, 339 of 2010, 356 of 2010 and 357 of 2010 have been filed at pre-decisional stage seeking writ of prohibition; W.P.Nos.5003 of 2010, 5088 of 2010, 5121 of 2010, 5131 of 2010 and 5903 of 2010 are post-decisional cases seeking writ of Certiorari. The facts of each writ petition would be referred to later at the relevant stage. 3. In all the writ petitions, the petitioner raised common questions of law on the maintainability of the consumer cases instituted by the respondents (complainants) as falling beyond the jurisdiction of the consumer fora established under the Consumer Protection Act, 1986 (for brevity ‘the Act’). The writ petitions, therefore, are clubbed and disposed of together by this common order. 4. For the sake of convenience, the sole writ petitioner (common in all the writ petitions) is hereinafter referred to as “opposite party” and the contesting respondents in each of the writ petitions are hereinafter referred to as the “complainants”. BRIEF FACTS:- 5. The brief facts which led to the filing of the writ petitions are that the opposite party, carrying on the business of real estate to provide housing plots, invited members of public through paper publication and brochures to purchase plots in its ventures viz., “Central Park-II”, “Central Part-III”, situated at Kondapur village, “Rolling Meadows Project”, Madinaguda village of Serilingampally Mandal, Ranga Reddy District and “East City”, B.B.Nagar, Nalgonda District. Intending purchasers were to be enlisted as members on payment of fees and allotment of plots would be made only to such members subject to certain terms and conditions. The complainants became members on payment of the said amounts and specific plots were allotted to them. The allotment of the said plots were subject to certain terms and conditions (which would be adverted to later). The cost of the plots included Development Charges. Mode of payment was either lump sum with discount on the total cost or by monthly instalments. The complainants claim that they made payments in full as per the terms and conditions and waited for registration of the plots. On the failure of the opposite party to register, the complainants instituted cases before the respective consumer fora established under the Act seeking appropriate reliefs which included to direct the registration of the respective plots (in some cases, to release sale deeds/to withdraw cancellation of allotment/to take back the allotted plot and refund the amounts) or to pay the present market value and to pay compensation towards mental agony, loss and damages and also costs. The opposite party would maintain that the complainants defaulted in the discharge of their obligations and that the cases as presented by each of the complainants do not come within the purview of the provisions of the Act and are not amenable to the jurisdiction of the fora established under the Act. This in brief is the cause for the opposite party for filing these writ petitions. 6. Sri D.Prakash Reddy, learned senior counsel and Sri V.L.N.G.K. Murthy, learned counsel, instructed by Sri Venkat Reddy Donti Reddy, advanced elaborate arguments on behalf of the opposite party. Sri B.Mayur Reddy, learned counsel for the Union of India and Sri T.Balaji, Sri G.Rama Gopal, Srinivas Karra and Sri P.Shiv Kumar, learned counsel for the complainants, advanced their arguments on behalf of the Union of India and the complainants. 7. The learned counsel for the opposite party would contend that the dispute presented by the complainants is not “service” within the meaning of Section 2 (o) of the Act; and the complaints as to non- registration of the plots other reliefs as sought for by the complainants would give raise to a common law remedy in a Civil Court. The dispute relates to only residential plots, not a contract for house construction, therefore, the complainant cannot be considered as a ‘consumer’ as envisaged in Section 2 (1) (d) of the Act. “Consumer” as defined would relate to goods and services and not to the transfer of immovable property. Transfer of immovable property is under the purview of provisions of the Transfer of Property Act, 1882 and the Indian Contract Act, 1872. The breach of any obligation of the contractor may give raise to enforcement of such obligations by specific performance through a Civil Court. The consumer fora therefore has no jurisdiction to deal with the matters relating to specific performance. The opposite party is not a service provider and did not commit act of deficiency. The learned counsel would further submit that several complaints of similar nature were dealt with by different fora - District Forum I, II and III, Hyderabad and District Forum, Ranga Reddy District and conflicting views were expressed as to the maintainability of the complaints. There being no uniformity, the opposite party is exposed to multiple litigation. They would therefore contend that the consumer fora shall be declared as incompetent to deal with the cases instituted by the complainants. 8. Per contra, the learned counsel appearing for the complainants would contend that the nature of business undertaken by the opposite party is not a sale simplicitor. An intending purchaser should first subscribe to the membership on payment of the prescribed fee and pay initial amount towards part payment of the cost of the plot. On being enlisted as a member, plot is allotted and the balance sale consideration would become payable either in instalments or in lumpsum and as per the terms and conditions of allotment, the opposite party would sell only fully developed plots and plots would be registered after final sanction of layout by the concerned Authority. The opposite party, as per the terms and conditions reserved all rights to accept or reject any obligation and also to cancel allotment of plots and refund the advance deposits standing to the credit of the member after taking service charges. They would further contend that despite full payments made, the opposite party defaulted in its obligation to register the plots. The business undertaken by the opposite party comes within the meaning of ‘service’ and the complainant comes within the meaning of ‘consumer’ and the default committed by the opposite party comes within the meaning of the ‘deficiency of service’. They would therefore, contend that the cases instituted by them are maintainable before the respective consumer fora. They would further contend that in the light of the provisions of Section 3 of the Act, which provide that the provisions of the Act are in addition to and not derogation of the provisions of any other law for the time being in force, the complainants are under no obligation to invoke the common law remedy in a Civil Court. 9. To appreciate the contentions it is necessary to examine the exact nature of the dispute between the parties. 10. The opposite party started ventures to develop land as house sites and sell to the intending purchasers. As per the scheme, the intending purchasers were required to become members on payment of membership fee and on such enrolment, specific plots were allotted in the ventures preferred by the complainants at a cost which included the development charges. The scheme provided both for lump sum with discount and also payment in instalments. Broadly the terms and conditions as annexed to W.P.No.28246 of 2009 are as follows : (conditions relating to development of plots, payment of development charges and registration after final sanction of layout by HUDA/Town and Country Planning Department are common to all the writ petitions.) TERMS AND CONDITIONS 1. Company reserves all rights to accept/to reject any application. 2. Rs.300/- Membership Fee is non-refundable. 3. The Company sells only fully developed plots. 4. 10% premium is to be paid for a corner plot. 5. Lumpsum payment should be made within one month of submitting the application to avail lmpsum discount facility. 6. Instalment payments must be made by 15th of the month due, failing which the instalments have to be paid with 15% interest. 7. In case of default, the Company reserves the right to cancel allotment of plot (s) and refund the advance deposit amount standing to the credit of the member, after deducting service charges. 8. Registration charges and stamp duty will be borne by members, as per rates prevailing at the time of registration. 9. Plots will be registered after final sanction of layout by HUDA and receipt of complete payments from members. 10. All transactions subject to Ranga Reddy/ Secunderabad/ Hyderabad Jurisdiction. 11. In addition to the above, the facts pleaded in each of the consumer cases are broadly as follows : 1. W.P.No.28246 of 2009 – writ of prohibition to interdict the proceedings in C.C.No.813 of 2009 on the file of the District Consumer Disputes Redressal Forum-I, Hyderabad. The Complainant was allotted Plot No.499 in the venture Central Park, Phase-III at a cost of Rs.2,25,000/-, inclusive of developmental charges. The complainant paid the said amount. The opposite party delayed the registration of the plot and the reasons for the delay were communicated by letter dated 25-02-2009 stating that the lay out plan was prepared and after carrying out the preliminary development works on the site, necessary lay out proposal was submitted to the HUDA in the year 2006 and the HUDA has been raising periodical objections. The company has cleared all the objections and approval of the draft plan was delayed for want of U.L.C. clearance by the Government. The Opposite Party also requested the complainant to shift to another venture which the complainant declined to accept. Complaining that 12 years have lapsed since the payment has been made, the Opposite Party did not inform that the HUDA authorities have not approved the venture, therefore committed unfair trade practice and deficiency of service. On the said basic pleadings, the complainant sought reliefs; to register the plot; in the alternative, to pay the present market value of the plot; to pay compensation of Rs.3.00 lakhs towards mental agony and loss and for punitive damages under Section 14 (1) (d) of the Act; and to award costs of Rs.3,000/-. 2. W.P.No.302 of 2010 – Writ of prohibition to interdict the proceedings in C.C.No.749 of 2009 on the file of the District Consumer Forum-I, Hyderabad. The complainant on becoming a Member in 1997 was allotted a corner plot bearing No.525 in the venture Central Park, Phase-III, at a cost of Rs.3,14,600/- which included an extra amount of Rs.28,600/- for the said corner plot. The said amount included the development charges also. The Opposite Party assured that progress on the site would be informed once in six months. The complainant paid Rs.10,000/- on 07-11-1997, Rs.60,000/- under receipt dated 20-11- 1997, Rs.50,000/- under receipt dated 20-12-1997 and Rs.1,00,000/- under receipt dated 03-01-1998 and finally Rs.94,600/- under receipt dated 11-02-1998, thus paid the entire cost. After considerable time by letter dated 06-10-2004 the complainant was informed that the HUDA sought for certain clarifications and the Opposite Party is liaisoning with HUDA to ensure the expeditious commencement of the registration passes. Again by letter dated 02-05-2009 the complainant was informed that the approval was still pending and in the meanwhile U.L.C. issued orders declaring the land as surplus land and the efforts were being made for U.L.C. clearance. Pleading that despite paying the entire cost of the plot which included the development charges, the Opposite Party has not registered the plot and resorting to unfair trade practice and deficiency of service causing loss and mental agony, the complainant sought for the reliefs; to register the plot or in the alternative, to pay the present market value of the plot; to pay compensation including the punitive damages and also costs similar to the writ petition in W.P.No.28246 of 2009. 3. W.P.No.3947 of 2010 – Writ of prohibition to interdict the proceedings in C.C.No.39 of 2009 on the file of the A.P.State Consumer Disputes’ Redressal Commission, Hyderabad. The complainant was allotted corner plot No.347 in the venture Central Park, Phase-II and as per the conditions of allotment the complainant paid initial amount of Rs.50,000/- on 29-02-1996 and the balance amount of Rs.1,38,500/- in 55 monthly instalments at Rs.2,500/- per month. The complainant also paid premium of Rs.19,850/- as the plot is corner plot. Whenever there was delay in payment of instalments, she paid additional interest also. Thus, paid the entire cost of the plot, which included the development charges. As per the brochure, the Opposite Party should obtain approval of lay out from the HUDA and register the plot and the Opposite Party kept dodging the registration and ultimately on constant persuasion, registered the plot after collecting additional amounts in June, 2007 by reducing the area to 379 square yards instead of 397 square yards as originally allotted. The Opposite Party collected additional development charges of Rs.1,02,330/- and also interest of Rs.97,214/- on the said development charges and for registration. The Opposite Party is also demanding Rs.2,27,400/- as caution deposit, which is not part of the agreement, the Opposite Party is also collecting maintenance charges and threatened to withhold the registration documents if maintenance amounts were not paid. Despite the registration, the Opposite Party has not delivered the sale deed to the complainant. The Opposite Party failed to obtain HUDA approvals, due to which the complainant had to obtain permission under the lay out regularization scheme by paying additional amounts. Thus, the Opposite Party is guilty of deficiency of service and sought for the reliefs; to direct payment of Rs.20,70,572/- being the amount excessively collected and Rs.25,000/- towards mental agony and costs of the complaint. The Opposite Party filed the counter and denied the various allegations made by the complainant. The Opposite Party objected to the maintainability of the complaint contending that the dispute is of civil nature amenable to the Civil Courts, but not to the jurisdiction of the Consumer Forum. Since several disputed questions are involved, the Consumer Forum cannot decide the same in summary manner. The Complainant is not a consumer and that the Opposite Party does not render any services to the complainant for consideration as required in Section 2 (1) (o) of the Act. The Opposite Party also has not committed any acts of deficiency in service and the amounts paid by the complainant if at all are only towards sale consideration and the other charges paid or payable to the Opposite Party towards development charges and registration charges, which are agreed to be paid by the complainant herself. The Opposite Party has invested huge amounts of money to maintain and upkeep the entire venture and to make it suitable for habitation with all necessary amenities including development of roads, underground sewerage, water supply, parks, electricity round the clock, security etc. The complainant paid the cost of the plot and registration charges as well as the developmental charges etc., as agreed voluntarily without any coercion or undue influence. The complainant was bound to meet expenses towards developmental charges, additional developmental charges, architect charges, stamp duty and expenses in relation to clearance of the land from the respective Government Officials, thus the complainant is estopped from claiming any amount or any relief against the Opposite Party. 4. W.P.No.5091 of 2010: - Writ of prohibition to interdict proceedings in C.C.No.803 of 2009 on the file of the District Consumer Forum-II, Hyderabad. The complainant was allotted Plot No.158 in the venture Central Park-II for a total consideration of Rs.1,50,000/- inclusive of development charges. Initially, he paid Rs.46,000/- and the balance was payable in 52 installments at Rs.2,000/- per month upto February, 2010. Later, by letter, dated 12.1.2006, the opposite party informed the complainant that in order to meet the norms of HUDA plots were re- aligned and re-adjusted resulting in the increase of plot’s size of the complainant by 50 yards for which, additional demand of Rs.2,10,000/- at the rate of Rs.14,000/- per sq.yd. was made. However, the opposite party without registering the plot cancelled the membership and returned an amount of Rs.1,47,500/- vide letter, dated 2.11.2007. The complainant also paid the balance sale consideration on 20.11.2007. As the efforts of the complainant to pursue it the opposite party to withdraw the cancellation and register the plot failed, he approached the Forum alleging deficiency of service, unfair trade practice and sought for the reliefs; to direct the opposite party to withdraw the letter of cancellation of membership dated 02-11-2007; to direct the opposite party to regularize the membership by withdrawing unpaid cheque amount as a balance sale consideration and award compensation of Rs.1.00 lakh for adopting unfair trade practice, mental agony and deficiency and costs of Rs.20,000/-. Upon such complaint, the Forum gave a notice dated 09-11-2009 for appearance and counter. 5. W.P.No.26520 of 2009: - Writ of prohibition to interdict proceedings in C.C.No.741 of 2009 on the file of the District Consumer Forum-I, Hyderabad. The complainant was admitted as a member and allotted plot Nos.642 and 643 in the venture Central Park phase-III. The complainant paid total consideration of Rs.4,95,000/-. An agreement was executed on 23-08-2001 in which the opposite party undertook to register the plots after developing the layout fully with black topped roads, centralized sewage disposal system, lighting and other amenities. The opposite party failed to register the plots despite several requests and the registration was delayed on the pretext of the pendency of approval of layout by the HUDA. The complainant was offered alternate plots at Medchal which is far away from the city to which the complainant declined to accept. On the failure of the opposite party to discharge its obligation, the complainant instituted the consumer dispute alleging deficiency of service and sought for the reliefs; to direct the opposite party to execute and register the sale deed in respect of the said plots or alternatively to pay Rs.19.00 lakhs towards the present market value; to award a sum of Rs.1.00 lakh towards damages and compensation for mental agony and for costs. 6. W.P.No.360 of 2010: - Writ of prohibition to interdict proceedings in C.C.No.143 of 2009 on the file of the District Consumer Forum-I, Hyderabad. The complainant was allotted two plot Nos.W44 and W45 in East City, Sector IV, B.B.Nagar, Nalgonda District in the year 1994. She made initial payment of Rs.6,000/- and balance payable in 34 monthly instalments at Rs.1500/- per month. The complainant paid the amount in full in addition to Rs.14,000/- towards registration charges as demanded by the opposite party vide letter dated 10-12-2003. The complainant offered alternate plots in Block G 42 and 43 on condition to pay registration charges at Rs.100/- per square yard. The complainant declined new plots but expressed willingness to pay Rs.100/- per square yard for the originally allotted plots. Again the opposite party offered another plot BH 6 in Sector V which also the complainant declined. The opposite party demanded additional amounts towards development charges and delayed the registration of the plots and adopting unfair trade practice. The complainant complied with the terms and conditions and already paid development charges and the cost of the plots originally allotted. The opposite party defaulted in registering the plot. The complainant sought reliefs; to register the plots by accepting registration charges at Rs.100/- square yard; to pay compensation of Rs.1.00 lakh for the delay in registration and for the harassment suffered; to pay costs of Rs.5,000/- and to pay Rs.2,500/- towards costs of legal notice issued by the complainant. The opposite party filed counter. While admitting that the complainant joined as a member for purchasing the plot in the year 1994, it alleged that the complainant failed to pay the development charges as agreed. The complainant has committed breach of contract and failed to perform the obligations under the terms and conditions despite reminders. The dispute involved is contractual in nature in respect of which, the Forum has no jurisdiction. The complainant should rather approach the Civil Court for specific performance. The complainant is not a consumer and the opposite party is not a service provider. After the complainant paid the amounts in the year 2004, many developments were made on the plot. The land was protected from grabbers by recruiting guards, land was developed by marking plots, laying roads, open drains, sewerage lines, streetlights etc. incurring huge expenditure for which, the complainant is liable to pay apart from registration charges and stamp duty at the prevailing rate. The complainant was informed by letter, dated 28.3.2007 to clear the outstanding dues towards cost of development charges, registration charges and interest charges. The opposite party cancelled the allotment and that the complainant is not entitled for the reliefs sought for. The matter was posted for argument to 23-12-2009. 7. W.P.No.364 of 2010: - Writ of prohibition to interdict proceedings in C.C.No.227 of 2009 on the file of the District Consumer Forum-III, Hyderabad. The complainant was allotted plot No.42, Block H in Sector IV in East City, B.B.Nagar, Nalgonda District in the year 1992. In the year 2007, the complainant was informed that initially development of Sector IV was still in progress and on the ground of escalation of costs, the complainant was asked to pay additional charges at RS.100/- per square yard to complete the development work, thus burdened with additional amount of Rs.37,500/- as against Rs.25,000/- originally fixed. The opposite party increased the amounts from time to time. No development activity was under taken and later in 2008, the opposite party demanded payment of Rs.1,00,750/- and Rs.9,600/- towards maintenance charges unilaterally without there being such condition in the allotment. The plot was registered and the opposite party declined to release the document without payment of Rs.21,156/- as on 17-06- 2000. With the above pleadings, the complainant sought reliefs; to direct the opposite party to handover registered sale deed; to direct the opposite party to provide free