Supreme Court Overturns NCDRC Order in Housing Allotment Dispute: Rajasthan Housing Board vs. Ratan Devi (22 July 2019)

Introduction

Date of the Judgment: 22 July 2019
Citation: 2019 INSC 703
Judges: Dr Dhananjaya Y Chandrachud, J and Indira Banerjee, J.

Can a consumer forum direct a housing board to allot a house at rates from 1992, when the allottee failed to pay the balance amount and approached the forum after a delay of 16 years? The Supreme Court of India addressed this question in a case between the Rajasthan Housing Board and an allottee, Ratan Devi. The core issue revolved around the delay in filing a consumer complaint and whether the housing board could be compelled to allot a house at rates from 1992, despite the allottee’s failure to pay the balance amount within the stipulated time. The bench comprised of Justice Dr. Dhananjaya Y Chandrachud and Justice Indira Banerjee, with the judgment authored by Justice Dr. Dhananjaya Y Chandrachud.

Case Background

In 1990, Ratan Devi applied for a Low Income Group (LIG) tenement. She deposited Rs 4,000 on 21 February 1991. On 30 April 1992, the Rajasthan Housing Board allotted her a tenement in the Mansarover Scheme, House No. 124/53. The allotment letter stated that a balance of Rs 47,674 was payable at the time of possession.

The Rajasthan Housing Board claimed that Ratan Devi failed to deposit the balance, leading to the cancellation of the allotment on 6 April 1994. However, Ratan Devi contended that she did not receive a possession letter and that the balance payment was contingent upon receiving possession. She also denied receiving the cancellation letter.

Timeline

Course of Proceedings

The District Consumer Disputes Redressal Forum, Jaipur, allowed Ratan Devi’s complaint and directed the Rajasthan Housing Board to allot the tenement. However, the State Consumer Disputes Redressal Commission (SCDRC) set aside the District Forum’s order in a split verdict.

On revision, the National Consumer Disputes Redressal Commission (NCDRC) restored the District Forum’s order, noting that (i) the balance was to be paid at the time of possession; (ii) no possession letter was proved to have been served; (iii) the cancellation letter was not proved to have been served; and (iv) the deposited amount was not refunded. The NCDRC ordered the allotment of the LIG tenement to Ratan Devi upon payment of the balance amount with 6% interest, along with compensation and litigation expenses.

Legal Framework

The case primarily involves the interpretation of the Consumer Protection Act, 1986, specifically concerning the limitation period for filing consumer complaints. While the judgment does not quote the specific provision, the court references the limitation period under the Consumer Protection Act, 1986, emphasizing that complaints must be filed within the prescribed time.

Arguments

Arguments of the Respondent (Ratan Devi):

• Ratan Devi argued that the balance amount of Rs 47,674 was payable only at the time of receiving possession of the tenement.
• She contended that she never received a letter offering possession from the Rajasthan Housing Board.
• She also disputed receiving the cancellation letter dated 6 April 1994 from the Housing Board.
• She emphasized that the amount she had deposited was not refunded by the Rajasthan Housing Board.

Arguments of the Appellant (Rajasthan Housing Board):

• The Rajasthan Housing Board argued that Ratan Devi failed to deposit the balance amount of Rs 47,674, leading to the cancellation of the allotment on 6 April 1994.
• The Board referred to two letters from Ratan Devi: one dated 15 April 1996, where she admitted her inability to pay due to financial constraints and another dated 4 May 2008, reiterating her financial difficulties.
• The Housing Board contended that Ratan Devi’s consumer complaint was filed after a delay of 16 years, making it time-barred under the Consumer Protection Act, 1986.
• The Board argued that it could not be compelled to allot a house at the rates of 1992, given the delay and the changed circumstances.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a numbered list. However, the core issue was:

• Whether the consumer complaint filed by Ratan Devi was maintainable given the significant delay and whether the Rajasthan Housing Board could be directed to allot a tenement at the rates of 1992.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court did not specifically cite any authorities in this judgment. The court primarily relied on the facts of the case and the limitation period under the Consumer Protection Act, 1986.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

There were no authorities cited in the judgment.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Delay in Filing the Complaint: The Court emphasized that Ratan Devi filed the consumer complaint nearly 16 years after the allotment was made. This delay was considered a significant factor, rendering the complaint time-barred under the Consumer Protection Act, 1986.
• Respondent’s Admission of Financial Inability: The Court noted that Ratan Devi, in her letters dated 15 April 1996 and 4 May 2008, admitted her inability to pay the balance amount of Rs 47,674 due to her financial condition. This admission weakened her claim that the delay was solely due to non-receipt of the possession letter.
• No Basis for 1992 Rates: The Court found no legal or logical basis to direct the Rajasthan Housing Board to allot the tenement at the rates of 1992, especially considering the significant delay and the changed circumstances.
• Equitable Relief: While setting aside the NCDRC order, the Court exercised its powers under Article 142 of the Constitution of India to direct a refund of Rs 1,00,000 to Ratan Devi, including the initial deposit and litigation expenses, as an equitable measure.

Sentiment Analysis of Reasons Given by the Supreme Court:

Fact:Law Ratio:

Logical Reasoning:

The Court’s reasoning was that the delay in filing the consumer complaint was a major factor, and the respondent’s own admission of financial difficulties further weakened her case. The Court also found no legal basis to compel the Housing Board to allot a tenement at the rates of 1992. The Court, however, directed a refund of Rs 1 lakh as an equitable measure under Article 142 of the Constitution.

The Supreme Court, while setting aside the order of the NCDRC, stated:
“In this factual background, the complaint before the District Forum was hopelessly delayed and was filed beyond the period of limitation as prescribed under the Consumer Protection Act, 1986.”

The Court further observed:
“The appellant could not have been directed to hand over the tenement to the respondent. In any event, the authority could not have been held down to the rates of 1992. There is no basis in principle for such a direction.”

The Court also noted:
“However, in the exercise of the jurisdiction of this Court under Article 142 of the Constitution of India, we are inclined to issue a direction for refund of the amount of Rs 25,000 which was deposited by the appellant. In terms of the interim order passed by this Court on 23 April 2018, we are of the view that the respondent should be paid a total amount of Rs 1 lakh by the appellant, over and above the litigation expenses as directed by this Court.”

Key Takeaways

• Consumer complaints must be filed within the limitation period prescribed under the Consumer Protection Act, 1986.
• Housing authorities cannot be compelled to allot properties at old rates after significant delays and when the allottee has failed to make timely payments.
• The Supreme Court may exercise its powers under Article 142 of the Constitution to ensure equitable relief, even when setting aside orders of lower courts or tribunals.

Directions

The Supreme Court directed the Rajasthan Housing Board to refund a total amount of Rs 1 lakh to Ratan Devi within two months of receiving a certified copy of the order. This amount includes the initial deposit, interest, and litigation expenses.

Development of Law

The ratio decidendi of this case is that consumer complaints filed after a significant delay beyond the prescribed limitation period are not maintainable. Additionally, housing authorities cannot be compelled to allot properties at old rates when the allottee has failed to make timely payments. This judgment reinforces the importance of adhering to limitation periods under the Consumer Protection Act and clarifies that equitable relief does not extend to compelling allotment at outdated rates.

Conclusion

The Supreme Court’s decision in Rajasthan Housing Board vs. Ratan Devi overturned the NCDRC’s order, emphasizing the significance of adhering to limitation periods for filing consumer complaints. The Court held that a complaint filed after a 16-year delay was not maintainable. While setting aside the order, the Court directed a refund of Rs 1 lakh to the respondent as an equitable measure, highlighting the court’s power to ensure justice even when setting aside judgments.