Tamil Nadu Housing Board & Ors vs Sea Shore Apartments Owners Welfare ...

2. Shortly stated the facts are that the Tamil Nadu Housing Board (hereinafter referred to as the Board) was constituted under the Tamil Nadu Housing Board Act, 1961 (Act 17 of 1961). The primary object of creation of the Housing Board was to acquire land in the neighbourhood areas of developed cities at a reasonable price and to construct tenements, houses and flats thereon for providing residential accommodation to needy people of different income groups and categories. In the year 1982, vast piece of land admeasuring about 28 acres of Thiruvamiyer, Chennai was acquired by the State of Tamil Nadu under the Land Acquisition Act, 1894 for a public purpose, viz. for the development of the area known as South Madras Neighbourhood Scheme. On February 27, 1991 the Board approved a proposal to construct seven different types of flats. It proposed to construct 102 flats under its High Income Group Scheme (HIG Scheme for short). In order to assess demand from public, an advertisement was issued by the Board on March 21, 1991 inviting applications for registration under the title Avail a chance of owning your own flat in Thiruvanmiyur Extension, Madras. Seven types of flats were mentioned in the said advertisement along with plinth area, tentative price, initial deposit, monthly instalment, repayment period, amount of deposit for registration, etc. It was stated that pursuant to the said advertisement applications were made by interested persons. There was overwhelming demand and several persons applied. The record reflects that finally instead of seven types of flats, fifteen types of flats were constructed under HIG Scheme. The Board issued letters on August 13, 1993 to the applicants asking them whether they were willing to purchase flats. Necessary details of the type, design, plinth area, tentative selling price and other particulars were supplied. Draw was conducted on October 15, 1993 and provisional allotment letters were issued on October 19, 1993. Tentative cost was specified in the letter which was to be paid within a period of 21 days. Final allotment order was made on August 9, 1994 wherein final cost of the flat was mentioned. An agreement was entered into between the Housing Board and allottees on August 22, 1994. In the said agreement, it was mentioned that it was agreed between the parties that the ultimate cost of the total construction of the flat was subject to the outcome in the award of compensation in land acquisition proceedings pending adjudication and the final amount will be fixed on that basis which will be paid by the members. Thereafter possession of flats was given to all allottees. The members were then asked to pay additional amount. The respondent-Sea Shore Apartments Owners Welfare Association [Association for short] felt that the demand made and amount recovered by the Housing Board was neither legal nor proper. It could not have demanded more amount. The amount which was fixed earlier was already paid and the members of the Association were not treated fairly. It, therefore, made representation on December 26, 1994 against the additional amount. In the said representation, the Association asked the Board to give reasons for enhancement of price of flats as also for reduction of period of payment of instalments from 15 years to 13 years. The Board, however, did not reply to the said letter. Even subsequent letter was not responded. Seven complaints were, therefore, filed by the allottees before the State Commission on May 26, 1995 under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act). Prayers were made in the complaints to direct the Board and its officers to return the escalation amount paid by the members of the Association with interest thereon; to restrain the Board and its officers from insisting on payment of excess amount as demanded; to direct the Board to collect the instalments in 15 years as per the order of allotment issued earlier; to pay compensation of rupees one lakh for the loss sustained and mental agony suffered by the members of the Association and to pay costs of the complaints. It was also stated that the complainants had claimed relief for those members also whose names had been given in the Annexure to the complaints.

5. Being aggrieved by the order passed by the State Commission, the Board approached the National Commission. The National Commission by a short order dated February 25, 2002 dismissed all the appeals observing inter alia that the State Commission recorded that not a scrap of paper has been filed by the opposite party to show that there was any land acquisition proceedings before any court in respect of the lands in question. According to the National Commission, the action of the Board in increasing price was on non existing grounds and hence the demand was not legal. The appeals were accordingly dismissed.

6. The Board has challenged these decisions by filing present appeals. On November 25, 2002, notice was issued. On September 15, 2003, leave was granted after hearing the parties. Operation of the impugned order was also stayed subject to the appellants depositing the disputed amount in the Court within a period of four weeks from the date of the order. The Registry was directed to invest the said amount. The matters were thereafter ordered to be posted for hearing. That is how the matters are before us.

(i) increase in plinth area, (ii) increase in ground area, and (iii) payment of enhanced compensation to land owners. In view of the above pleas and defences, the State Commission ought to have dismissed the complaints. The State Commission, however, failed to do so. But even otherwise, the State Commission did not consider all the defences in their proper perspective and held that the Board was not entitled to claim additional amount and issued certain directions including refund of amount with interest. Obviously, the Board was aggrieved and it approached the National Commission. But the National Commission also, without considering the points raised by the Board confirmed the order passed by the State Commission and dismissed the appeals. Both the orders, therefore, are not in consonance with law and are liable to be set aside.

2. The opposite parties are directed to refund to the members of the complainant Association who have made full payment, the excess amount collected with interest thereon at 12% from the date of collection till payment.

4. The opposite parties are also directed to pay a consolidated sum of Rs.7,000/- as costs to the Complainant Association at the rate of Rs.1,000/- per complaint.

(emphasis supplied)

30. For the foregoing reasons, all the appeals are allowed. The order passed by the State Commission and confirmed by the National Commission is set aside. All the complaints are remitted to the State Commission to decide them in accordance with law after hearing the parties. On the facts and in the circumstances of the case, there shall be no order as to costs. Amount if any, deposited by the appellant-Board in this Court may be refunded to the Board with accrued interest thereon. Since the original complaints were filed in 1995, the State Commission will give priority to the cases and decide them as expeditiously as possible preferably before June 30, 2008.

31. At this stage, we may clarify that we should not be understood to have expressed any opinion one way or the other on the controversy raised by the parties. All the observations made by us hereinabove are limited for the purpose of holding that the State Commission as also National Commission ought to have dealt with and decided the contentions raised by the Housing Board. Therefore, as and when the complaints will be placed for hearing before the Commissions, they will be decided strictly on their own merits without being inhibited by those observations.

32. Ordered accordingly.