Auction Purchaser Is Not Consumer Under Consumer Protection Act, Chandigarh District Commission Dismisses Complaint Against HUDA

Brief Facts:

The Allottees were jointly allotted a double-story shop in Sector 12, Urban Estate, Karnal through an open auction conducted by the Haryana Urban Development Authority (HUDA). They paid 25% of the total amount but could not deposit the remaining 75% due to financial constraints caused by the prolonged illness of one of the Allottees, who passed away in 2009. Subsequently, two more of them also faced health issues and passed away in 2015 and 2021 respectively. According to guidelines, the remaining amount could have been paid in instalments with interest, but HUDA issued an order in 1998 to resume the site and forfeited 10% of the initial amount. The Allottees had executed General Power of Attorney (GPA) and wills in favour of the Complainant. The complainant argued that similar cases had been resolved favourably by the HUDA by condoning delays and including interest. Despite representations and legal documents submitted, HUDA did not provide a reasoned response and upheld the resumption order.

Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (“District Commission”) against HUDA. HUDA argued that the Allottees did not adhere to the terms and conditions specified in the allotment letter. It asserted that the Allottees failed to make timely installment payments as required, despite repeated notices and opportunities provided. Further, the Estate Officer, HSVP, Karnal had rightfully resumed Double Story Shop (DSS) No. 206, Karnal, due to the Allottees' failure to deposit any amount beyond the initial 25% of the shop's cost. HUDA also challenged the Complainant's status as a consumer under the Consumer Protection Act, of 2019.

Observations by the Commission:

The District Commission considered the complaint filed by the Complainant, who contested the cancellation of the Allottee's allotment letter following an auction conducted by HUDA. The Complainant alleged that HUDA's decision to cancel the allotment and subsequent orders lacked justification, constituting a deficiency in service and unfair trade practice. HUDA argued that an auction purchaser cannot be considered a consumer under the Consumer Protection Act, of 2019. It cited the case of U.T. Chandigarh Administration & Anr. vs. Amarjeet Singh & Ors. [(2009) 4 SCC 660], where the Supreme Court held that auction participants bid with full awareness of the site's conditions and amenities available, and thus cannot later dispute payment terms or allege consumer grievances against the auctioning authority.

Based on this legal principle, the District Commission concluded that an auction purchaser does not fall under the definition of a consumer, and therefore, there was no deficiency in service or unfair trade practice on the part of HUDA. Consequently, the consumer complaint was dismissed. The District Commission noted that the Complainant retained the right to pursue the matter in a court of competent jurisdiction or appropriate forum.

Case Title: Raj Kumar Malik vs Haryana Urban Development Authority and Anr.

Case No.: CC/836/2021

Date of Pronouncement: June 18th, 2024