Consumer Complaints Alleging Deficiency In Service Related To Transfer Of Title Of Immovable Property Not Maintainable: Supreme Court

The Supreme Court observed that consumer complaints on the ground of deficiency in service related to transfer of title of the immovable property is not maintainable.

The expression 'service' includes housing construction and not allotment of a site or a plot, the bench of Justices Hemant Gupta and A.S.Bopanna observed.

In this case, the complainant before District Consumer Forum sought conversion of a Plot allotted by Chandigarh administration from leasehold to freehold site on acceptance of the requisite conversion fee. The District Forum directed the Estate Officer under Chandigarh administration to convert the said plot from leasehold to freehold site on acceptance of requisite conversion fee and to pay an amount of Rs. 10,000/- as compensation for mental agony and physical harassment; and to also pay Rs.5,000/- as costs of litigation. This order was affirmed by State and National Consumer Disputes Redressal Commissions.

Before the Apex Court in appeal, the Estate Officer questioned the findings recorded by the NCDRC that the complainants are consumers as charges have been paid for conversion. It was contended that such a finding is not tenable for the reason that the charges deposited were not for any services to be rendered but to grant complete title to the allottees.  

The bench, agreeing with the said contention, noted that expression 'service' includes housing construction and not allotment of a site or a plot. It observed":

19. In terms of Section 14(e) of the Consumer Act, the District Forum can inter-alia direct removal of deficiency in the services. The deficiency in service however does not include the transfer of title in favour of the allottee who was earlier granted leasehold rights. As noted above, appellant is not providing any services within the meaning of Section 2(o) of the Consumer Act. The expression 'service' includes housing construction and not allotment of a site or a plot"

24. Since the respondents are already in possession of the sites as lessee on 99 years basis, it cannot be said that the appellant was deficient in providing any service, which even if used in a liberal sense would not include transfer of title in an immovable property. Thus, the consumer fora under the Act would not have jurisdiction to entertain the consumer complaints on the ground of deficiency in service related to transfer of title of the immovable property.

The court, however, added that though it is not a case of the deficiency in service as contemplated by Consumer Act but definitely a case of exercise of jurisdiction in an arbitrary and discriminatory manner. Therefore, invoking powers under Article 142 of the constitution, the court directed the Administration to decide the claim of conversion as on the date when consumer complaints were filed.

26. The difficulty in the Administration is that the senior officers in the Chandigarh Administration are on deputation from the States of eiither Punjab or Haryana. The officers revert to their parent cadre after completion of deputation period of approximately three years. However, the officials continue to work at the Estate Office. Though the Administration has done commendable work to maintain the character of Chandigarh as City Beautiful, but the Estate Office has underbelly, that is, the action of the officials cannot be said to be bona fide, as is apparent in the present case. It is a typical case of 'you show me face, I will show the Rule'. On the other hand, the officers are unable to take decisions which are citizen friendly. Even no attempt is made to remove the bottlenecks in the working of the Estate Office."

The court also directed the administration to constitute a committee to review and streamline the processes of sanction of mutation, grant of occupancy certificate, no-objection certificate and other citizen-centric requirements

The residents of Chandigarh are widely harassed while seeking no-objection certificate for sale of leasehold property as the procedure for grant of no-objection certificate and of deposit of unearned increase is interpreted in different manners by the different officials, which the officers of the Administration has failed to control. Another area of concern is the unreasonable procedure adopted by the Administration for affecting mutation after the demise of the leaseholder or the allottee and of completing other formalities at the offices of the appellant. The difficult and near impossible procedure leads to arbitrary and discriminatory action by the officials of the Estate Office. Therefore, we direct Administration to constitute a Committee which may include a Member of Parliament; an architect; an advocate, who is or has represented Chandigarh Administration before the High Court; two representatives of the Municipal Corporation being representatives of the citizens of Chandigarh, apart from such officers which the Administration may think fit, so as to review and streamline the processes of sanction of mutation, grant of occupancy certificate, no-objection certificate and other citizen-centric requirements including calculation of unearned profit under the 1973 Rules or under 2007 Rules.

Case: Estate Officer vs. Charanjit Kaur ; CA 4964 OF 2021
Citation: LL 2021 SC 441
Coram: Justices Hemant Gupta and AS Bopanna

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