CHANDIGARH HOUSING BOARD versus AVTAR SINGH AND OTHERS

Citation: [2010] 12 S.C.R. 96 · Decided: 22-09-2010 · Supreme Court of India · Bench: G.S. SINGHVI · Disposal: Dismissed

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Judgment (excerpt)

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B 
[2010] 12 S.C.R. 96 
CHANDIGARH HOUSING BOARD 
V. 
AVTAR SINGH AND OTHERS 
(Civil Appeal No. 8203 of 2010) 
SEPTEMBER 22, 2010 
[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.] 
Consumer Protection Act, 1986 - s. 2(1)(d), (g), (o) and 
s. 12 - Chandigarh Allotment of Land to Co-operative House 
C Building Societies Scheme, 1991 - Envisaging allotment of 
land by Chandigarh Administration to Co-operative House 
Building Societies through Chandigarh Housing Board -
Construction of multistoried structures/dwellings for members 
of Societies - Non-allotment of land to Societies - Complaint 
o by members u/s. 12, for refund of 10% earnest money 
forfeited by the Board and 18% interest paid by them -
Maintainability of -
Held: Complaint is maintainable -
Members of the Societies were the real and ultimate 
beneficiaries - Provisions in the Scheme regulated the 
E relationship of the Societies with their members and also 
made them jointly and severally responsible for payment of 
the earnest money etc. - By making applications for 
allotment of land, Societies would be deemed to have hired 
or availed services of Chandigarh Administration and the 
F Board in relation to housing construction, thus, members 
covered by definition of 'consumer' uls. 2(d)(ii) and had right 
to file such complaint - Even though Finance Secretary 
decided to refund the earnest money, Board did not refund 
the forfeited portion of the earnest money to the members of 
G the Societies, thus, amounted to deficiency in service - 1952 
Act, 1973 Rules and 1991 Scheme does not provide for levy 
of 18% interest on the delayed payment of earnest money -
Chandigarh Administration and Board had no right to refuse 
refund of 18% interest -
Thus, .National Commission and 
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96 
CHANDIGARH HOUSING BOARD v. AVTAR SINGH. 
97 
AND ORS. 
State Commission justified in directing refund of the amount 
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of interest - Board directed to refund the amount due to 
complainant within the stipulated period -
Chandigarh 
Allotment of Land to Co-operative House Building Societies 
Scheme, 1991 -
Capital of Punjab (Development and 
Regulation) Act, 1952 - Chandigarh Lease Hold of Sites and 
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Buildings Rules, 1973. 
The Chandigarh Administration framed the 
'Chandigarh Allotment of Land to Co-operative House 
Building Societies Scheme, 1991' through Chandigarh 
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Housing Board for allotment of land to Co-operative 
House Building Societies. Fifty three Societies 
challenged the 1991 Scheme. The High Court dismissed 
the writ petition. In terms of the order of the High Court 
the members of the Societies paid the balance earnest 
money and 18% interest, however, the Board did not take 
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effective steps for allotment of land to the Societies. 
Respondent No.1 and others-members, applied through 
their respective Societies for refund of the amount paid 
by them. The Secretary of the Board sent a letter to the 
Finance Secretary, Chandigarh Administration for its 
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decision However, the Chief Accounts Officer of the 
Board suo motu remitted the atnount of earnest money 
to the Societies after deducting 10% in accordance with 
the memo dated 9.6.1993 issued by the Finance Secretary, 
Meanwhile, the Finance Secretary issued a memo dated 
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9.3.2000 directing that full earnest money would be 
refunded to the societies/and its members, however, the 
interest on the earnest money would not to be refunded. 
The members of the Societies filed complaints under the 
Consumer Protection Act, 1986 against the action of the 
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Board to forfeit 10% earnest money and the direction 
given by the Finance Secretary not to refund 18% 
interest. The District Forum held that the forfeiture of 10% 
earnest money in terms of the memo dated 9.6.1993 and 
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SUPREME COURT REPORTS 
(2010] 12 S.C.R. 
A non-refund of 18% interest were contrary to the 1991 
Scheme and the 1973 Rules and amounted to deficiency 
in service and unfair trade practice. The State 
Commission held that the Finance Secretary could not 
have used the power for giving directions in violation of 
B the Rules and the Scheme; that the memo dated 9.6.1993 
was contrary to clause 8 of the 1991 Scheme; that once 
the Finance Secretary had issued instructions vide memo 
dated 9.3.2000 that full refund of earnest money would be 
made to the Societies/and its members the Board should 
c have refunded the remaining amount to the complainants 
and its failure to do so amounted to deficiency in service; 
that the instructions issu

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