Important Points
(1) Cancellation – It is notable that the cancellation was done without even a letter setting out the reasons and/or steps taken by it to suitably rectify the situation.
(2) Refund – There was an arbitrariness in the manner of refund after deducting some developmental costs which were charged to the respondent even while seeking to refund the amount received.
(3) Non-profit basis – It is noteworthy that statutory authorities which works on a non-profit basis are not exempt from liabilities under the Consumer Protection Act and therefore the appellant’s appeal to be exempted from any liability qua the respondent.
(4) Public authority – As a public authority it was incumbent upon the appellant to ensure execution of its commitment to the respondent for which a consideration had been accepted.
(5) Refund – Mere refund after deductions after lapse of nearly 12 years and 10 months has been rightly refused by the respondent who has waited for the house to be handed over.

ORDER

Subhash Chandra, Presiding Member—This appeal assails the order dated 28.12.2020 in Consumer Case no. 165 of 2000 of the Uttar Pradesh State Consumer Disputes Redressal Commission, Lucknow (in short, ‘the State Commission’) holding that there are reasonable and sufficient grounds to establish deficiency in service on the part of the appellant and therefore, directing payment of Rs.6,82,500/- with 10% interest from the date of filing till realisation as compensation for construction, Rs.10 lakhs for harassment and mental agony within 3 months or with 10% interest till payment and litigation cost of Rs.10,000/-.

2. This order will also dispose of FA no. 654 of 2021 arising from the order of the State Commission in RA no. 05 of 2021 by which the RA had been allowed with regard to return of the deposited money through payment by cheque. For the sake of convenience FA no. 618 of 2021 is taken as the lead case.

3. In brief, the facts of the case are that the appellant, which is a Development Authority engaged in the development of housing projects on behalf of the Government of UP had, in a scheme announced by it in 1990, allotted an MIG Duplex House no. 5/1184, Viram Khand-5, Gomti Nagar Scheme, Phase I, Lucknow to the respondent vide allotment letter dated 20.09.1991 after receiving Rs.20,000/- on 08.10.1990 towards registration and another amount of Rs.20,000/- on 27.04.1991 towards allotment as per demand letter dated 04.02.1991. The consideration was Rs.2,55,000/- to be paid in instalments. On 03.12.1992, the appellant conveyed by letter that the project was near completion and the final cost was conveyed as Rs.3,76,800/-. An amount of Rs.81,800/- was accordingly paid by the respondent to the appellant over and above the cost of Rs.2,55,000. However, the said house was not constructed and handed over on purported grounds of negligence by the contractor and instead the appellant sought to refund the amount of Rs 2,77,564/- by cheque which was refused by the respondent.

4. Vide complaint no. 165 of 2000 preferred before the State Commission, the respondent prayed for possession or alternate MIG house along with interest @ 24% on Rs.3,76,800 paid by it to the appellant with effect from 06.01.1995 till the date of handing over the house. The prayer was subsequently amended to possession or payment of Rs. 7 lakhs for construction with interest @ 24% per annum and Rs. 10 lakhs as compensation and Rs.3 lakhs for harassment and mental agony. Thereafter, following the amendment to the Consumer Protection Act in 2002 the claim was enhanced to Rs. 56 lakhs for construction, compensation to Rs.20 lakhs and compensation for harassment, mental agony to Rs.9 lakhs.

5. The State Commission, vide order dated 20.06.2015, directed that the matter be heard by the District Forum in view of pecuniary jurisdiction. This order was challenged in First Appeal No. 595/2015 before the National Commission which was disposed by order dated 16.02.2016. The matter then travelled to the Hon’ble Supreme Court through Civil Appeal (S) no. 749 of 2020, which remanded the matter to the State Commission. The State Commission’s order in CC No. 165 of 2020 dated 28.12.2020 is assailed before us by the appellant (Lucknow Development Authority).

6. We have heard the learned counsel for the parties and given thoughtful consideration to the material on the record.

7. The appellant admitted that it had allotted Duplex House no. 5/1184, Viram Khand-5, Phase I, Gomti Nagar to the respondent and received Rs 3,76,800/- towards consideration, including the escalation in construction cost intimated subsequently. Its case is that the project could not be completed due to the negligence of the contractor and hence it offered a refund of Rs 2,77,564/- after deducting costs incurred by it. As the cheque was not accepted by the respondent, the amount was credited to his bank account. In view of negligence ascribed to the contractor, liability towards deficiency in service was