Grievances Related To Auctions Are Not Consumer Disputes, Chandigarh District Commission Dismisses Complaint Against HUDA

Brief Facts:

The Complainants were allotted a showroom site in an open auction conducted by the Haryana Urban Development Authority (HUDA). The total cost of the site was Rs. 14,22,000/-. However, the Complainants paid 25% of the total amount, totalling Rs. 3,55,000/-, pending possession of the site in 90 days. HUDA failed to deliver the possession of the site within the next 90 days, prompting the Complainants to retain the remaining 75% of the amount. Subsequently, an alternate showroom site was allotted to the Complainants. Despite this, the Complainants paid a total of Rs. 49,47,833/- in addition to the initial 25% payment and a further Rs. 1,350/- as interest. They sought a refund of the amount charged as interest on instalments, possession and penalties, owing to HUDA's failure to hand over possession from March 20th, 1991, to April 18th, 2012. HUDA declined these requests.

Feeling aggrieved, the Complainants filed a consumer complaint in the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (“District Commission”) against HUDA. In response, HUDA argued that the Complainants failed to pay the due instalments on time, despite several demand notices issued under Section 17 of the HUDA Act, 1977. HUDA claimed that this failure violated the terms and conditions of the allotment letters, which mandated timely payment of instalments. It maintained that the Complainants were obligated to pay the instalment amounts along with 15% per annum interest for the delayed period.

Observations by the District Commission:

The District Commission referred to the decision of the Supreme Court in U.T. Chandigarh Administration & Anr. Vs. Amarjeet Singh & Ors. [(2009) 4 SCC 660], where it was held that in a public auction without any guaranteed specific amenities, the purchaser is expected to make an informed decision based on the existing conditions of the site. The SC emphasized that if a purchaser participates in an auction with full awareness of the conditions, they cannot later claim grievances regarding the site's disadvantages or the lack of amenities as a basis for withholding payments or disputing interest and penalties.

The SC in this decision further clarified that in such public auctions, the purchaser/lessee is not considered a consumer, and the owner is not deemed a trader or service provider. Consequently, any grievances related to the auction do not constitute a consumer dispute, and thus, consumer forums do not have jurisdiction to address complaints from auction purchasers against the auctioning authority.

Therefore, the District Commission held that the auction purchaser (Complainants) is not a consumer. Consequently, the District Commission dismissed the complaint against HUDA.

Case Title: Rekha Rani and Anr. vs Haryana Urban Development Authority and Anr.

Case Number: CC/889/2021

Date of Decision: 18^th June 2024