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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5584 OF 2012 (Arising out of SLP (C) No. 12334 of 2009)

S. Srinivasa Murthy  … Appellant

versus

Karnataka Housing Board … Respondent

J U D G M E N T

G. S. Singhvi, J.

1. This  appeal  is  directed  against  order  dated  14.3.2008 of  the  National  

Consumer  Disputes  Redressal  Commission  (for  short,  ‘the  National  

Commission’) whereby the application filed by the appellant for review of order  

dated 9.9.2004 was dismissed.  

2. In  response  to  an  advertisement  issued  by  Karnataka  Housing  Board  

(respondent), which was published in the Times of India dated 14.7.1993, the  

appellant applied for allotment of a HIG flat in Vth Phase, Yelahanka under the  

self-financing scheme. He was allotted under S-HIGA Flat No.37, First Floor.  

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In the allotment letter issued on 29.11.1993, the tentative cost of the flat was  

shown as Rs.3,40,000/-.   

3. As per  the advertisement,  the  flat  was  to  be  ready for  occupation  by  

December, 1994 but the construction of the flat was completed only in 1998  

and possession thereof was delivered to the appellant on 19.5.1999.

4. In  the  meanwhile,  the  appellant  sent  letter  dated  14.12.1998  to  the  

Executive Engineer of the respondent with the request that he may be permitted  

to change the mode of purchase from lease-cum-sale basis to outright sale basis.  

He also conveyed his willingness to pay the balance amount required for that  

purpose. That letter reads as under:

“From S.SRINIVASA MURTHY, QR 9/TYPE IV, TELECOM QUARTERS, C.T.O. COMPOUND, JUHU ROAD, MUMBAI-400054 To

The Executive Engineer, Karnataka Housing Board, KHB Metro No.1 Dn, BANGALORE-560064.

Dear Sir,

Sub: Allotment of House at YELAHANKA-5 PHASE- SHIG-FF

Bangalore Metro Division I

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ALLOTMENT  CODE:  210-288-37:  Request  to  purchase  the  above  under  ABSOLUTE  SALE  DEED.

This is to request  you kindly permit  me to change the  purchase of the above allotment from LEASE-CUM-SALE to  ABSOLUTE SALE. I am willing to pay the balance amount  required for this purpose on receiving a letter from you for this  purpose. Please note that I require a letter indicating the balance  amount to be paid so that I can avail loan from my office and  send you the payment.

I shall await an early action on my request.

Thanking you, Yours faithfully,

Mumbai, 14-12-98

(S.SRINIVASA MURTHY)”

5. The respondent accepted the request of the appellant and allotted a flat to  

him in 3500-Multi-tenaments at Vth Phase, Yelahanka on outright sale basis.  

The cost of that flat was shown to be Rs.5,23,232/-.

6. Upon  receipt  of  the  revised  allotment  letters  dated  22.1.1999  and  

25.1.1999, the appellant sent communication dated 15.2.1999 to the Housing  

Commissioner of the respondent and protested against the alleged failure of the  

concerned authority to take cognizance of the fact that he had already deposited  

Rs.3,75,750/-.   Thereafter,  the  respondent  issued  letter  dated  6.4.1999  

indicating therein that the appellant is required to pay the balance amount of  

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Rs.1,57,482/-.  The appellant accepted the revised allotment and deposited the  

remaining amount.  

7. During the interregnum, the respondent suggested to the appellant that  

for the purpose of registration of the sale deed, the price of the flat be shown as  

Rs.4,31,918/- so that he will be required to pay registration charges on 81% of  

the  total  cost.  The  appellant  conveyed  his  acceptance  vide  letters  dated  

22.8.1998, 27.11.1998 and 15.5.1999. The English translation of the last letter  

is reproduced below:

“(TRANSLATION)

KARNATAKA HOUSING BOARD  "CONSENT LETTER"

I  have  been  allotted  by  the  Karnataka  Housing  Board  Flat  No.37-S-HIG 'A' F.F. on full price basis and I have paid the full  value of Rs.533232.00.

I am agreeable to the decision of the Board that the registration  value should be 81% of the sale price namely Rs.43198.00 and  the stamp duty should be paid over the said amount.

If the remaining 19% of the value is included in the registration  value the registration charges will be higher. Hence I agree to  have the registration done at 81% of the sale price and I will not  ask for refund of the remaining 19% of the sale price under any  circumstances.

            NAME OF THE ALLOTTEE Sd/-

S.V. Srinivasa Murthy Date: 15.05.1999”

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8. After taking possession of the flat, the appellant filed complaint under  

Section 17 of  the Consumer Protection Act,  1986 (for  short,  ‘the Act’)  and  

claimed the following reliefs:

“1.  Interest on basis cost of Rs.340000/- from 9.2.95  

     to 18.5.99 310675-00

2.   Refund of amount paid on 31.7.95   23840-00

3.   Interest on 2 above for the period from 31.7.95  

                to 18.5.99  19435-00

4.   Refund of amount paid on 13.1.96  11910-00

5.   Interest on 4 above for the period from 13.7.96 to

                18.5.99    7255-00

6.    Refund of amount paid on 29.4.99          157482-00

7.   Interest on 6 above for the period from 29.4.99 to

                18.4.99    1890-00

8.    Compensation for delay deficiency in specification

       and mental tension   50000-00

9.     Costs of the complaint     2000-00”

9. In the counter filed on behalf of the respondent, the following pleas were  

taken:

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(i) The  cost  of  the  flat  mentioned  in  the  allotment  letter  issued  on  

29.11.1993 was tentative and the same was revised keeping in view the relevant  

factors including the cost of construction.

(ii) The appellant is estopped from questioning the demand of additional cost  

because  he  had accepted  the  terms and conditions  embodied in  letter  dated  

29.11.1993 without any objection and, later on, he voluntarily sought change of  

the mode of purchase from lease-cum-sale basis to outright sale basis.

(iii) The time schedule fixed for completion of the flat was also tentative and  

possession of the flat was handed over after completion of construction and  

ancillary works.

10. The State Commission rejected the appellant’s plea for award of interest  

on the amount deposited by him and observed:

“Since the amount has been fixed as provisional at the time of  issuing advertisement and subsequently cost has been raised on  account of the escalation and the said amount has been paid by  the complainant, the complainant is not entitled to get interest  on the said amount as claimed in the complaint.”

11. The appellant’s grievance that there were deficiencies in the flat was also  

rejected by the State Commission by assigning the following reasons:  

“The  complainant  has  contended  in  his  complaint  and  in  his  affidavit  and  his  

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written arguments that the OP has handed  over  the  flat  not  as  per  the  specification-but with one bath room less.  This fact has not been disputed by the OP.  But however, OP contended that it has been  changed as per the advise of, Expert body.  The  learned  advocate  Mr.Venkataramaiah  submitted that in so far as violating the  specification  is  concerned,  the  Board  being  a  Public  Institution  works  under  special  schemes  and  the  notification  is  according to the scheme works out under a  Special  Committee  constituted  for  that  purpose.  Therefore,  the  contention  with  regard to alteration of the specifications  in  the  building  is  not  open  to  the  complainant as the Board has reserved its  right  subject  to  the  scheme  approved  by  the  committee  while  notifying  the  allotment itself.”

12. On  the  issue  of  delay  in  the  delivery  of  possession,  the  State  

Commission partly ruled in favour of the appellant and directed the respondent  

to pay compensation of Rs.25,000/-.  This is evident from paragraph 11 of the  

State Commission’s order, which is extracted below:

“As   far   as   the   delay   in   handing   over the possession   of  the flat is concerned, the OP has contended that the delay in  handing over the possession is not on account of deficiency in  service, but on account of various acts of nature administration  and  various  other  problems  which  do  not  amount  to  deficiency  in  service.  The  explanation  offered  by  the  OP  cannot  be  easily  accepted.   According  to  the  original  advertisement and the brochure issued by the Board the  flat  will be ready and has  to be  handed over by  the  end of 1994  but actually the  flat  was  handed over  to the complainant  on  

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19.5.99.   There was no fault  on the part of the complainant.  Under those circumstances we are of the opinion that ends of  Justice  will  be  met  if  we  direct  the  OP  to  pay  a  sum  of  Rs.25,000/- as compensation to the complainant for the delay in  handing over the flat.”

13. The  appeal  preferred  by  the  appellant  against  the  order  of  the  State  

Commission  was  dismissed  by  the  National  Commission  vide  order  dated  

9.9.2004.  The National Commission agreed with the State Commission that the  

cost indicated in the allotment letter was tentative and the respondent had the  

right  to  revise  the  same  and  further  that  the  appellant  was  not  entitled  to  

complain against the cost mentioned in the revised allotment letters because he  

had  voluntarily  sought  change  in  the  mode  of  purchase.  The  National  

Commission also held that the compensation awarded by the State Commission  

was just and proper.  

14. The application filed by the appellant for review of order dated 9.9.2004  

was also dismissed by the National Commission vide order dated 14.3.2008, the  

relevant portion of which is extracted below:  

“Undisputedly, the tentative cost of the flat booked was  Rs.3,40,000/-.  It  was  enhanced  from  Rs.3,40,000/-  to  4,35,000/-  and  further  to  Rs.4,83,000/-.  Though  the  Petitioner  had  paid  the  amount  as  per  allotment  letter  dated  6.4.99  a  further  amount  of  Rs.1,57,482/-  was  demanded which was also paid by him on 29.4.99 and  the sale deed was registered. He took the possession on  

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19.5.99 which was promised to be given in 1994 Since  the State Commission had already awarded interest @ 12  p.a. which was in tune with the decision of the apex court  in the case of  GDA Vs. Balbir Singh - (2004) 5 SCC 65.  The Appellant could not clam interest @ 18% p.a. on the  basis of earlier decisions of this Commission.”

15. The appellant reiterated the grievance made in the complaint and argued  

that the demand of additional price by the respondent was only unjustified and  

the State Commission and the National Commission committed serious error by  

declining to entertain his prayer for award of interest on the amount already  

deposited by him and the additional cost.  He further argued that the respondent  

was not entitled to arbitrarily change the mode of allotment from self-financing  

scheme to outright sale scheme and charge higher price without paying interest  

on Rs.3,40,000/- deposited by him in furtherance of the initial allotment. He  

further  argued  that  the  State  Commission  and  the  National  Commission  

committed grave error by refusing to direct the respondent to refund the excess  

amount of Rs.1,57,482/- with interest.  In the end, he argued that the respondent  

should be directed to refund Rs.1,01,314/- which was charged in excess of the  

cost of the flat mentioned in the sale deed.  

16. Learned  counsel  for  the  respondent  argued  that  the  cost  of  the  flat  

mentioned in the allotment letter issued on 29.11.1993 was tentative and was  

liable to revision till the completion of construction and the respondent did not  

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commit any error by revising the cost from Rs.3,40,000/- to Rs.4,35,360/- and  

then to  Rs.4,83,000/-.  He further  argued that  the appellant  cannot  complain  

against the demand of total cost of Rs.5,23,232/- because he had voluntarily  

sought change in the mode of purchase and accepted the cost indicated in the  

revised allotment letters issued on 22.1.1999 and 25.1.1999. Learned counsel  

further argued that the appellant is estopped from questioning the cost of flat  

indicated in revised allotment letters because the same cost has been charged  

from other allottees of HIG house under the outright sale scheme.

17. We have considered the respective arguments/submissions and carefully  

scanned  the  record.   In  our  view,  the  appellant  cannot  make any grievance  

against the cost specified in the revised allotment letters issued on 22.1.1999  

and  25.1.1999  because  he  had  voluntarily  sought  change  in  the  mode  of  

purchase  and  unequivocally  agreed  to  pay  the  cost  i.e.  Rs.5,23,232/-.   The  

appellant’s plea that the cost of the flat cannot be more than what was specified  

in the registered sale deed sounds attractive but lacks merit. A careful reading  

of letters dated 22.8.1998, 27.11.1998 and 15.5.1999 sent by the appellant to the  

respondent makes it clear that he had conveyed his unequivocal willingness for  

registration  of  the  sale  deed  showing  the  cost  of  the  flat  as  Rs.4,31,918/-  

although the actual cost was Rs.5,23,232/-.  Having taken advantage of the offer  

made by the Board to get the deed registered at a price less than the actual cost  

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of  the  flat,   the  appellant  cannot  turn  around  and  demand  refund  of  

Rs.1,01,314/-.

18. The appellant’s grievance against the quantum of compensation awarded  

by the State Commission also merits rejection because the complaint filed by  

him was not bona fide.   

19. In the result, the appeal is dismissed.

…...……..….………………….…J.          [G.S. Singhvi]

…………..….………………….…J.           [Sudhansu Jyoti Mukhopadhaya]

New Delhi, August 22, 2012.  

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