Disputes Relating To Auction Allotment Not Covered Under Consumer Protection Act: NCDRC

The National Consumer Disputes Redressal Commission (NCDRC) bench comprising AVM J Rajendra, Presiding member and Anoop Mendiratta, Member has held that an auction allottee of a property cannot be considered as a 'consumer' under the Consumer Protection Act, 2019. It was held that the transaction between the complainant and Kanhangad municipality, which allotted the room, does not give rise to a relationship between them as a consumer and service provider. Brief facts: The complainant participated in an auction conducted by Kanhangad Municipality through its secretary and chairman ('Opposite parties') for stall No. 8 of the municipality and paid Rs. 1,00,000/- as earnest money on 28.11.2007. His bid was duly confirmed. An assurance was given by the municipality that possession would be given before 15.12.2007. Based on this assurance, the complainant made necessary arrangements and paid advance for his goods to start a bakery on 17.12.2007. However, the opposite parties failed to hand over the room as promised which prevented the complainant from commencing his business. The complainant then issued a notice dated 05.01.2008 to which the opposite parties replied that a Writ Petition filed by the previous tenant is pending before the High Court due to which the delay occurred. As per the complainant, the opposite parties failed to hand over the possession of the room even after disposal of the Writ Petition. The complainant then filed a Writ Petition pursuant to which the High Court directed the municipality to consider the complainant's notice. Consequently, without addressing the complainant's claims, the opposite parties directed him to take possession after executing an agreement with a warning that failure to do so, would result in recovery of compensation from Rs. 1,00,000 deposited by him. Hence, the complainant was constrained to take the room. As per the complainant, the condition of the room was not fit for conducting a business and required several repairs for which the complainant approached the opposite parties. The opposite parties failed to undertake necessary repairs and directed the complainant to get it repaired on his own account and agreed that the amount spent by him would be adjusted in the funds of the municipality. The complainant spent Rs. 37,000 on the repairs. Thereafter, the opposite parties issued notice demanding Rs. 1,69,332/- as arrears of rent and threatened prosecution for non-payment. The complainant then executed an agreement dated 16.02.2009 and started his business. In May 2009, due to roof leakage, the rainwater entered the room resulting in damage to the complainant's goods forcing him to stop his business. He accordingly sought a rent waiver from the opposite parties but they cancelled his license. Hence, a complaint was filed by the complainant alleging deficiency in service on the part of the opposite parties. The Kerala State Commission partly allowed the complaint and directed the secretary of the municipality to return Rs. 1 lakhs deposited by the complainant without deducting any rent and to pay Rs. 55,000 towards compensation and costs. Since the complaint was partly allowed, the complainant filed an appeal before the NCDRC. Submissions of the complainant: It was submitted that relying on the assurance given by the opposite parties, the complainant took steps to commence his bakery business. However, the delayed possession was handed over in a dilapidated condition with a leakage in the roof. It was further submitted that substantial expenses had been incurred on bakery items. The complainant contended that though refund of Rs. 1,00,000 has been ordered by the state commission, it made an error in not awarding the interest on the amount which was wrongfully detained for over a decade. It was further submitted that a loan of Rs. 5,60,000 was taken by the complainant's wife to set up the bakery. Submissions of the opposite parties: As per the opposite parties, even after disposal of the Writ Petition, the complainant did not approach them for possession and instead filed another Writ Petition. The complainant's claim that the room was in a poor condition was denied. It was submitted that despite repeated requests, the complainant failed to execute the agreement and take possession but the municipal council resolved in its meeting to permit the complainant to take possession. It was further submitted that the business disruption was due to the complainant's own failure to pay rent despite notice which led to cancellation of license. Observations of the commission: The bench after examination of the facts and submissions made by the parties observed that the entire dispute pertains to an auction for which the complainant submitted his bid and was declared as a successful bidder. It placed reliance on the judgment of the Supreme Court in UT Chandigarh ...

Disputes Relating To Auction Allotment Not Covered Under Consumer Protection Act: NCDRC

Praveen Mishra

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