REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4964 OF 2021

(ARISING OUT OF SLP (CIVIL) NO. 5051 OF 2018)

ESTATE OFFICER AND ANR. .....APPELLANT(S)

VERSUS

CHARANJIT KAUR .....RESPONDENT(S)

W I T H

CIVIL APPEAL NO. 4965 OF 2021

(ARISING OUT OF SLP (CIVIL) NO. 5082 OF 2018)

A N D

CIVIL APPEAL NO. 4966 OF 2021

(ARISING OUT OF SLP (CIVIL) NO. 16740 OF 2018)

J U D G M E N T

HEMANT GUPTA, J.

1. This order shall dispose of three appeals bearing Civil Appeal No.

4964 of 2021 - Estate Officer v. Charanjit Kaur, Civil Appeal No.

4965 of 2021 - Estate Officer v. Kamlesh and Civil Appeal No. 4966

of 2021 - Estate Officer v. D.K. Khanna raising identical questions of

law.

2. In Civil Appeal No. 4964 of 2021, the order of the National

1

Consumer Disputes Redressal Commission

1

dated 24.05.2017 is

the subject matter of challenge. By the aforesaid order, the NCDRC

has dismissed the revision petition filed by the appellant against an

order dated 16.05.2016 passed by the State Consumer Disputes

Redressal Commission

2

affirming the order of the District Consumer

Disputes Redressal Forum

3

. The respondent had sought conversion

of Plot No. 4059, Sector 46 D, Chandigarh, from leasehold to

freehold site on acceptance of the requisite conversion fee. The

learned District Forum directed the appellant to convert the said

plot in question from leasehold to freehold site on acceptance of

requisite conversion fee; to pay an amount of Rs. 10,000/- as

compensation for mental agony and physical harassment; and to

pay Rs.5,000/- as costs of litigation.

3. The learned NCDRC relied upon the judgment of this Court reported

as Lucknow Development Authority v. M.K. Gupta

4

to hold

that the respondent would be considered to be a consumer as fee

had been charged by the appellant for conversion. The NCDRC

further held that the administrator had put a note on the file that

he would not like to take any decision till he gets clear directions

from the Central Government. It was held that the appellant had

not produced any public notification suspending all conversions of

plots from leasehold to freehold, at least on 28.03.2013 when the

1 For short the ‘NCDRC’

2 For short the ‘SCDRC’

3 For short the ‘DCDRF’

4 (1994) 1 SCC 243

2

application was received in the office of Estate Officer.

4. In Civil Appeal No. 4965 of 2021, the impugned order was passed

by NCDRC on 17.11.2017 relying upon the order passed in

Charanjit Kaur. In the said case, the respondent was allotted a

site under Chandigarh Milk Colony Allotment of Site Rules, 1975

5

on 08.08.1977 measuring 143 sq. yards on a leasehold basis for a

period of 30 years for the purposes of cowshed cum dairy. The

Chandigarh Conversion of Residential Leasehold Land Tenure into

Freehold Land Tenure Rules, 1996

6

were extended to the sites

allotted under the 1975 Rules. The lease period of 30 years was

extended by four years so that 1996 Rules could be made

applicable. The request of the respondent for conversion of

leasehold to freehold was not accepted which led to filing of a

complaint before the District Forum. The District Forum passed an

order on the same lines as in Charanjit Kaur. The NCDRC also

dismissed the revision filed by the appellant on 17.11.2017 relying

upon Charanjit Kaur.

5. In the third appeal herein i.e., Civil Appeal No. 4966 of 2021, the

order under challenge is that of the NCDRC passed on 21.03.2018

in respect of conversion of a residential site bearing no. 719,

Sector-43A, Chandigarh, from leasehold to freehold. The order in

Charanjit Kaur was followed in this matter as well.

6. Some of the statutory provisions need to be reproduced before

examining the respective contentions of the parties. Section 3 of

5 For short ‘1975 Rules’

6 For short ‘1996 Rules’

3

the Capital of Punjab (Development and Regulation) Act, 1952

7

reads as:-

“3.Power of Central Government in respect of transfer of

land and building in Chandigarh. – (1) [Subject to the

provisions of this section, the Central Government may] sell,

lease or otherwise transfer, whether by auction, allotment or

otherwise, any land or building belonging to the Government

in Chandigarh on such terms and conditions as it may

subject to any rules that may be made under this Act, think

fit to impose.

(2)The consideration money for any transfer under sub-

section (1) shall be paid to the [Central Government] in such

manner and in such instalments and at such rate of interest

as may be prescribed.

(3) Notwithstanding anything contained in any other law

for the time being in force, until the entire consideration

money together with interest or any other amount, if any,

due to the Central Government on account of the transfer of

any site or building, or both, under sub-action (12) is paid,

such site or building, or both, as the case may be, shall

continue to belong to the Central Government.”

7. In terms of power conferred on the Central Government under

Section 3, initially Chandigarh (Sale of Sites and Buildings) Rules,

1960

8

were published on 08.03.1960. Such rules contemplated sale

of sites by auction or allotment. The Chandigarh Lease Hold of

Sites and Building Rules, 1973

9

were thereafter published on

20.08.1973 authorizing Chandigarh Administration to demise sites

and buildings at Chandigarh on lease for 99 years by allotment or

by auction. Rule 13 mandates that in addition to the premium i.e.,

price paid or promised for the transfer of a right to enjoy an

immovable property under 1973 Rules, an annual rent would be

7 For short ‘1952 Act’

8 For short ‘1960 Rules’

9 For short ‘1973 Rules’

4

payable which shall be 2½% of the premium for 33 years which

may be enhanced by the Chandigarh Administration to 3.75% for

the next 33 years and 5% of the premium for the remaining period

of lease. In terms of Rule 17, the property could be transferred on

payment of unearned increase in terms of Rule 17. The relevant

provisions of 1973 Rules read thus:

“3.(1)Unless the context otherwise requires, the

words and expressions used in these rules shall have the

meaning assigned to them in the Capital of Punjab

(Development and Regulation) Act, 1952 and the rules made

thereunder.

(2)“Premium” means the price paid or promised

for the transfer of a right to enjoy immovable property under

these rules.

[“Prescribed mode of payment” means payment in

cash or by demand draft drawn on any Scheduled Bank

situated at Chandigarh in favour of the Estate Officer,

Chandigarh Administration or in cash upto Rs.500/- or the

amount paid in cash representing 25% of the premium at

the time of auction].

13.Rent and consequences of non-payment- In addition

to the premium, whether in respect of site or building, the

lessee shall pay rent as under:

(i) Annual rent shall be 2-½ % of the premium for the 33

years which may be enhanced by the Chandigarh

Administration to 3-3/4% of the premium for the next 33

years and to 5% of the premium for the remaining period of

the lease.

17.General Conditions of lease. – (1) Lease may be jointly

taken by more than one person. The liability to pay the

premium as well as the rent and any penalty imposed under

these rules shall be joint and several:

(10)The lessee will not be entitled to transfer the site or

the building without the prior permission of the Estate

Officer. Such permission shall not be given until the lessee

has paid full premium and the rent due under the lease for

the site, unless in the opinion of the Estate Officer

exceptional circumstances exist for the grant of such

permission. The lessee shall be liable to pay such transfer

charges as are notified by the Chandigarh Administration

5

from time to time.”

Provided that where the property was leased out by

allotment, or at a reserve price or at any other concessional

rate, or by hire-purchase, then transfer shall be allowed on

payment of 1/3

rd

of the unearned increase in value. The

unearned increase will be assessed by the Estate Officer by

determining the difference between the current market

value of the property and the present value of the premium

paid for the property. The current market value of the

property shall be assessed in view of the average of auction

price over the last three financial years for property of the

same category or such other evidence as the Estate Officer

deems to be appropriate. The present value of the original

premium shall be calculated by enhancing the premium by

9% per annum, compounded annually, from the date(s) of

payment. The difference between these two values shall be

the unearned increase. During assessment, notice shall be

issued to the lessee and he shall be afforded an opportunity

of being heard.”

8. The Chandigarh Administration framed 1996 Rules permitting

conversion of residential leasehold properties to freehold

properties. Some of the conditions of the said Rules are as follows:

“5.Land rates will be the rates as notified by the

Chandigarh Administration from time to time.

6.Conversion charges to be paid shall be as provided in

Annexure “A” annexed to these rules, from time to time.

8.The conversion shall also be allowed in the cases

where the lessees/sub-lessees/allottees have parted with the

possession of the property, provided that-

(a)The application for Conversion is made by a person

holding registered and valid power of attorney and

there is also an agreement to sell from the lessee to

sub-lessee to alienate (sell/transfer) the property and

proper linkage with the original allottee/lessee is

established.

9. In all cases of Conversion, the Conveyance-deeds shall

be got registered on payment of requisite Stamp Duty and

Registration Charges. The Consideration amount for this

purpose shall be the “Conversion Fee” and the “Surcharge”

wherever applicable. However, in cases where lease deed

6

has not been executed, the Price/Premium of the site as

reflected in the letter of allotment or last agreement for sale

or the predetermined rate as prescribed by the Competent

Authority on the date of allotment/transfer shall also be

added for the purpose of calculation of Stamp Duty.”

ANNEXURE “A”

Part – I

STATEMENT SHOWING ONE TIME CONVERSION, CHARGES/FEE FOR

VARIOUS SITES ALLOTTED BY THE ESTATE OFFICER, UNION

TERRITORY, CHANDIGARH.

Site area in Sq.

Metres

Conversion

charges/fee to be

calculated as under

Formula for

calculating

charges/conversion

charges/fee

1 2 3

Upto 50 Nil Nil

The land rate has been fixed at Rs.1710/- per Square Metre

and the same shall be applicable for a period of one year

from the date as notified by the Estate Officer, Union

Territory, Chandigarh. The land rate applicable for

calculating the Conversion Charges shall be notified from

time to time by the Administrator, Union Territory,

Chandigarh.”

9. The grievance of the allottees was that conversion was allowed on

pick and choose basis rather than on the basis of either the date of

receipt of the application or the date of decision. Reference was

made to the letter dated 10.5.2013 on behalf of the Finance

Secretary to the Estate Officer. The said letter reads as: -

“To

The Estate Officer

U.T. Chandigarh

Memo No. 11/1/18-UTFI(2)-2013/3520

Dated: 10-5-2013

Subject: Re-fixation of rate for conversion of lease hold

residential sites into free hold.

Reference your memo No.7610/MA/Conversion

Policy/2013 dated 4.3.13, on the subject cited above.

7

The issue of revision of rate for conversion under the

scheme “Chandigarh Conversion of residential lease hold

land tenure into freehold land tenure, Rule 1996” is under

consideration of the Administration.

You are directed not to allow any conversion under the

said scheme till further orders.

Sd/-

Joint Secretary (Estates)

For Finance Secretary

Chandigarh Administration”

10.Mr. Ankit Goel, learned counsel for the appellant argued that the

title of leasehold property vests with the Central Government in

terms of Section 3 of the Act and the Rules framed thereunder. The

Central Government had granted lease of residential plots for a

period of 99 years under the 1973 Rules. The conversion fee fixed

to convert leasehold property leased for 99 years to freehold

property, if allowed, would absolve the allottees from payment of

annual rent in terms of Rule 13 as well as the payment of unearned

increase in the case of transfer of leasehold rights in terms of Rule

17(10) of the 1973 Rules. Thus, an un-encumbered title would pass

on to the purchaser as against 99-year lease to an allottee under

the 1973 Rules. Therefore, the findings recorded by the NCDRC

that the respondents are consumers as charges have been paid for

conversion are not tenable for the reason that the charges

deposited were not for any services to be rendered but to grant

complete title to the allottees. Such conversion fee was in fact part

of the sale consideration to confer complete title to an allottee.

11.Still further, it was argued that the reliance on the judgment in

8

M.K. Gupta was clearly erroneous inasmuch as that was a case

wherein the allotment of flats was considered to be “service”

within the meaning of Section 2(1)(o) of the Consumer Protection

Act, 1986

10

. Some of the provisions from the Consumer Act as are

relevant for the decision of the present case are as under:

(c) “complaint” means any allegation in writing made by

a complainant that-

(i) xxx xxx xxx

(iii)the services hired or availed of or agreed to be

hired or availed of by him suffer from deficiency

in any respect;

(d)“consumer” means any person who-

xxx xxx xxx

(ii)hires or avails of any services for a consideration

which has been paid or promised or partly paid and

partly promised, or under any system of deferred

payment and includes any beneficiary of such services

other than the person who [hires or avails of] the

services for consideration paid or promised, or partly

paid and partly promised, or under any system of

deferred payment, when such services are availed of

with the approval of the first mentioned person [but

does not include a person who avails of such services

for any commercial purpose;

(g)“deficiency” means any fault, imperfection,

shortcoming or inadequacy in the quality, nature and manner

of performance which is required to be maintained by or

under any law for the time being in force or has been

undertaken to be performed by a person in pursuance of a

contract or otherwise in relation to any service;

(o)“service” means service of any description which is

made available to potential users and includes, but not

limited to, the provision of facilities in connection with

banking, financing insurance, transport, processing, supply of

electrical or other energy, board or lodging or both, housing

construction, entertainment, amusement or the purveying of

news or other information, but does not include the rendering

of any service free of charge or under a contract of personal

10 For short ‘Consumer Act’

9

service;

14. Finding of the District Forum .—(1) If, after the

proceeding conducted under Section 13, the District Forum

is satisfied that the goods complained against suffer from

any of the defects specified in the complaint or that any of

the allegations contained in the complaint about the

services are proved, it shall issue an order to the opposite

party directing him to do one or more of the following

things, namely:

(a) xxx xxxx

(e) to remove the defects in goods or deficiencies in

the services in question;

(f) xxx xxxx

12.In M.K. Gupta, the question posed was as to the word “service”

extends to the deficiency in construction of a house or flat. It was

held that such construction was for the benefit of person for whom

it was to be constructed. The allottee may do so himself or hire

services of a builder or contractor. When a statutory authority

develops land or allots a site or constructs a house for the benefit

of common man, it is a statutory service. But if such service is

provided by a builder or contractor, it would be a contractual

service. The Court held as under:

“4. What is the meaning of the word ‘service’? Does it

extend to deficiency in the building of a house or flat? Can

a complaint be filed under the Act against the statutory

authority or a builder or contractor for any deficiency in

respect of such property. The answer to all this shall depend

on understanding of the word ‘service’. The term has

variety of meanings. It may mean any benefit or any act

resulting in promoting interest or happiness. It may be

contractual, professional, public, domestic, legal, statutory

etc. The concept of service thus is very wide. How it should

be understood and what it means depends on the context

10

in which it has been used in an enactment. Clause (o) of the

definition section defines it as under:

“‘service’ means ……………………..”

It is in three parts. The main part is followed by inclusive

clause and ends by exclusionary clause. The main clause

itself is very wide. It applies to any service made available

to potential users. The words ‘any’ and ‘potential’ are

significant. Both are of wide amplitude. …….

6. Construction of a house or flat is for the benefit of

person for whom it is constructed. He may do it himself or

hire services of a builder or contractor. The latter being for

consideration is service as defined in the Act. Similarly

when a statutory authority develops land or allots a site or

constructs a house for the benefit of common man it is as

much service as by a builder or contractor. The one is

contractual service and other statutory service. If the

service is defective or it is not what was represented then

it would be unfair trade practice as defined in the Act. Any

defect in construction activity would be denial of comfort

and service to a consumer. When possession of property is

not delivered within stipulated period the delay so caused

is denial of service. Such disputes or claims are not in

respect of immoveable property as argued but deficiency

in rendering of service of particular standard, quality or

grade. Such deficiencies or omissions are defined in sub-

clause (ii) of clause (r) of Section 2 as unfair trade

practice. If a builder of a house uses substandard material

in construction of a building or makes false or misleading

representation about the condition of the house then it is

denial of the facility or benefit of which a consumer is

entitled to claim value under the Act. When the contractor

or builder undertakes to erect a house or flat then it is

inherent in it that he shall perform his obligation as agreed

to. A flat with a leaking roof, or cracking wall or

substandard floor is denial of service. Similarly when a

statutory authority undertakes to develop land and frame

housing scheme, it, while performing statutory duty

renders service to the society in general and individual in

particular. The entire approach of the learned counsel for

the development authority in emphasising that power

exercised under a statute could not be stretched to mean

service proceeded on misconception. It is incorrect

understanding of the statutory functions under a social

legislation. A development authority while developing the

land or framing a scheme for housing discharges statutory

duty the purpose and objective of which is service to the

citizens. As pointed out earlier the entire purpose of

11

widening the definitions is to include in it not only day to

day buying of goods by a common man but even such

activities which are otherwise not commercial but

professional or service-oriented in nature. The provisions

in the Acts, namely, Lucknow Development Act, Delhi

Development Act or Bangalore Development Act clearly

provide for preparing plan, development of land, and

framing of scheme etc. Therefore if such authority

undertakes to construct building or allot houses or building

sites to citizens of the State either as amenity or as

benefit then it amounts to rendering of service and will be

covered in the expression ‘service made available to

potential users’. A person who applies for allotment of a

building site or for a flat constructed by the development

authority or enters into an agreement with a builder or a

contractor is a potential user and nature of transaction is

covered in the expression ‘service of any description’. It

further indicates that the definition is not exhaustive. The

inclusive clause succeeded in widening its scope but not

exhausting the services which could be covered in earlier

part. So any service except when it is free of charge or

under a constraint of personal service is included in it.

Since housing activity is a service it was covered in the

clause as it stood before 1993.”

13.The judgment in Ghaziabad Development Authority v. Balbir

Singh

11

was in the context of grant of interest at the rate of 18%.

Such grant of interest was not interfered with. This Court approved

the judgment in M.K. Gupta and held as under:

“We are in full agreement with what is observed herein. Thus

the law is that the Consumer Protection Act has a wide reach

and the Commission has jurisdiction even in cases of service

rendered by statutory and public authorities. Such authorities

become liable to compensate for misfeasance in public office

i.e. an act which is oppressive or capricious or arbitrary or

negligent provided loss or injury is suffered by a citizen. The

word compensation is of a very wide connotation. It may

constitute actual loss or expected loss and may extend to

compensation for physical, mental or even emotional

suffering, insult or injury or loss.”

14.In Chandigarh Housing Board v. Avtar Singh and Ors.

12

, the

11 (2004) 5 SCC 65

12 (2010) 10 SCC 194

12

Cooperative Housing Societies submitted an application for

allotment of plots advertised by Chandigarh Housing Board. The

Societies collected 10% of the tentative price from their members

and deposited the same in a bank specified in the scheme. If any

member was to seek refund, then 10% out of the 25% of the

earnest money was to be deducted. The dispute before the High

Court was in respect of the direction of 10% of the amount. This

Court held as under:

“51. If the final order passed by the High Court is read in

conjunction with the interim order dated 11-5-1992, it

becomes clear that the Societies were to deposit the

remaining amount with interest at the rate of 18% per annum

only if they were to accept allotment of flats under the

Scheme. Although, the writ petitions were filed by the

Societies, the language of the interim order passed by the

High Court shows that the learned Judges were thinking of

imposing liability of 18% interest only on those members who

were to accept allotment of flats to be constructed by the

Societies. The members of the Societies did not get an

opportunity to accept the allotment because even after

deposit of full earnest money and 18% interest, the Board did

not allot land to the Societies on which they could construct

dwelling units/flats. The Finance Secretary misinterpreted the

orders of the High Court and issued wholly arbitrary and

unjust directive to the Board not to refund 18% interest to

the members of the Societies who had applied for refund

before allotment of land by the Board.”

15.In fact, the precise issue as to whether the auction of sites under

the 1973 Rules involves sale of goods or of rendering of service

came up for consideration in UT Chandigarh Administration

and Another v. Amarjeet Singh and Others

13

. This Court

considered the judgments of this Court in M.K. Gupta and Balbir

Singh. One of the arguments raised was as under-

13 (2009) 4 SCC 660

13

“When the auction of sites (for grant of a lease for 99 years)

was in exercise of the power of the Government (the UT

Chandigarh Administration) under the provisions of the

Development Act in accordance with the Leasehold Rules, it

involves neither sale of goods nor rendering of any service.

The act of leasing plots by auction by the appellants

therefore did not result in the successful bidder becoming a

“consumer” or the appellants becoming “service providers”.

In the absence of hiring or availing of any service, the

question of deficiency in service or unfair or restrictive trade

practice with reference to a service, did not arise and the

complaint under the Act was not maintainable.”

16.In respect of the abovementioned question posed, it was held as

under:

“21. With reference to a public auction of existing sites (as

contrasted from sites to be “formed”), the purchaser/lessee

is not a consumer, the owner is not a “trader” or “service

provider” and the grievance does not relate to any matter in

regard to which a complaint can be filed. Therefore, any

grievance by the purchaser/lessee will not give rise to a

complaint or consumer dispute and the fora under the Act

will not have jurisdiction to entertain or decide any

complaint by the auction-purchaser/lessee against the

owner holding the auction of sites.”

17.The second question was in respect of lack of amenities i.e., roads,

water supply lines, drainage system, rainwater drainage and

electricity etc. This Court held that since the sites were put to

public auction, therefore, no grievance regarding amenities could

be entertained as the bidder had the opportunity to verify the sites

before participating in the auction.

18.In the present case, the allotment of residential sites on lease hold

basis for 99 years is not in issue. It has not come on record as to

whether such sites were allotted in an auction or by inviting

applications. Even if the site had been allotted after inviting

14

applications, the fact remains that the respondents claim

conversion of such lease hold sites to free hold sites on payment of

the charges which are fixed by the Administration. Such conversion

was sought in view of the fact that as against the limited right in

the lease property for 99 years, the Administration has decided to

grant freehold rights on satisfaction of certain conditions

mentioned in the 1996 Rules. The fact is that the respondents had

paid the premium amount as fixed under the 1973 Rules. Now, the

claim is for purchase of remaining rights of the Central Government

to convert the site into freehold. The Central Government

continues to be owner of the land until the entire consideration

money together with interest or any other amount is paid to the

Central Government on account of transfer of any site or building

or both as provided in Section 3 of the Act. Therefore, the owner

i.e., the Central Government, cannot be said to be a trader or a

service provider. The appellant is not charging any fee for

conversion of leasehold property into freehold property except the

amount in accordance with the 1996 Rules, which is part of the sale

consideration. It is thus a case of sale of immovable property on

the terms as were fixed in the 1996 Rules. The amount so fixed

under the Rules would form part of the sale consideration and not a

fee or charge levied for providing any kind of service.

19.In terms of Section 14(1)(e) of the Consumer Act, the District

Forum can inter-alia direct removal of deficiency in the services.

The deficiency in service however does not include the transfer of

15

title in favour of the allottee who was earlier granted leasehold

rights. As noted above, appellant is not providing any services

within the meaning of Section 2(1)(o) of the Consumer Act. The

expression ‘service’ includes housing construction and not

allotment of a site or a plot.

20.The Consumer fora had taken into consideration a noting in the ad-

ministrative file of the appellant. A noting is however a part of the

decision-making process. Such noting does not fructify into an or-

der unless the same is communicated to the affected person. The

reference may be made to Bachhittar Singh v. State of

Punjab

14

, wherein this Court held as under:-

“9. The question, therefore, is whether he did in fact make

such an order. Merely writing something on the file does not

amount to an order. Before something amounts to an order of

the State Government two things are necessary. The order has

to be expressed in the name of the Governor as required by

clause (1) of Article 166 and then it has to be communicated.

As already indicated, no formal order modifying the decision of

the Revenue Secretary was ever made. Until such an order is

drawn up the State Government cannot, in our opinion, be

regarded as bound by what was stated in the file. As long as

the matter rested with him the Revenue Minister could well

score out his remarks or minutes on the file and write fresh

ones.

10. The business of State is a complicated one and has

necessarily to be conducted through the agency of a large

number of officials and authorities. The Constitution, therefore,

requires and so did the Rules of Business framed by the

Rajpramukh of PEPSU provide, that the action must be taken by

the authority concerned in the name of the Rajpramukh. It is

not till this formality is observed that the action can be

regarded as that of the State or here, by the Rajpramukh. We

may further observe that, constitutionally speaking, the

Minister is no more than an adviser and that the head of the

14 AIR 1963 SC 395

16

State, the Governor or Rajpramukh [ Till the abolition of that

office by the Amendment of the Constitution in 1956.], is to act

with the aid and advice of his Council of Ministers. Therefore,

until such advice is accepted by the Governor whatever the

Minister or the Council of Ministers may say in regard to a

particular matter does not become the action of the State until

the advice of the Council of Ministers is accepted or deemed to

be accepted by the Head of the State. Indeed, it is possible that

after expressing one opinion about a particular matter at a

particular stage a Minister or the Council of Ministers may

express quite a different opinion, one which may be completely

opposed to the earlier opinion. Which of them can be regarded

as the “order” of the State Government? Therefore, to make the

opinion amount to a decision of the Government it must be

communicated to the person concerned. In this connection we

may quote the following from the judgment of this Court in

the State of Punjab v. Sodhi Sukhdev Singh [AIR (1961) SC 493,

512] :

“Mr Gopal Singh attempted to argue that before

the final order was passed the Council of Ministers had

decided to accept the respondent's representation and

to reinstate him, and that, according to him, the

respondent seeks to prove by calling the two original

orders. We are unable to understand this argument.

Even if the Council of Ministers had provisionally

decided to reinstate the respondent that would not

prevent the Council from reconsidering the matter and

coming to a contrary conclusion later on, until a final

decision is reached by them and is communicated to

the Rajpramukh in the form of advice and acted upon

by him by issuing an order in that behalf to the

respondent.”

Thus it is of the essence that the order has to be communicated

to the person who would be affected by that order before the

State and that person can be bound by that order. For, until the

order is communicated to the person affected by it, it would be

open to the Council of Ministers to consider the matter over

and over again and, therefore, till its communication the order

cannot be regarded as anything more than provisional in

character.

21.Therefore, the noting by itself cannot be pressed into service to

return a finding of deficiency in service. However, the fact remains

that in terms of 1996 Rules, an amount of Rs.1710/- per sq.mt. was

17

fixed as conversion charges. The land rates were to be fixed by the

Administration from time to time under Rule 5 of 1996 Rules. In

Annexure-A, the land rate for conversion was fixed at Rs.1710/- per

sq.mt. The same was to be applied for a period of one year. But as

admitted at the Bar, the rates were revised only in 2017. The

action of the appellant in rejecting the request for conversion is

thus arbitrary and discriminatory. The request could not be kept

pending when the statutory Rules were in force. The executive

authority could not by an administrative order keep the matter

pending, when there was no other reason not to accept the

conversion except impending increase in the conversion charges.

22.It is the stand of the appellant that no conversion was allowed after

a letter was issued on 10.05.2013. The Administration has

however allowed conversion of leasehold properties into freehold

even after the said letter dated 10.05.2013, as conversion of plots

bearing file No. RPL 19565 and RPL 19601, was allowed on

04.12.2013 and 11.11.2013 respectively.

23.Mr. Goel has argued that there cannot be any negative equality as

even if some sites have been converted in contravention of the

decision communicated on 10.05.2013, it would not confer any

enforceable right in favour of the allottees. Reference was made to

Chandigarh Administration v. Jagjit Singh

15

. We do not find

any merit in the argument of Mr. Goel. On the date when the letter

was issued by the administration on 10.05.2013, the statutory

15 (1995) 1 SCC 745

18

1996 Rules were in force. Such Rules were kept in abeyance on the

basis of communication on behalf of the Finance Secretary to the

Estate Officer. Such communication cannot be countenanced. The

statutory rules could not be put to hold because the issue of

revision of rates of conversion was under consideration of the

Administration. Even after the said letter the rates were fixed only

in 2017. In the face of valid statutory Rules, an administrative

decision cannot be sustained.

24.Since the respondents are already in possession of the sites as

lessee on 99 years basis, it cannot be said that the appellant was

deficient in providing any service, which even if used in a liberal

sense would not include transfer of title in an immovable property.

Thus, the consumer fora under the Act would not have jurisdiction

to entertain the consumer complaints on the ground of deficiency

in service related to transfer of title of the immovable property.

25.We find that it is not a case of the deficiency in service as

contemplated by Consumer Act but definitely a case of exercise of

jurisdiction in an arbitrary and discriminatory manner. In exercise

of the power conferred on this Court under Article 142, we direct

the Administration to decide the claim of conversion as on the date

when consumer complaints were filed. Such action shall be taken

within 3 months.

26.The difficulty in the Administration is that the senior officers in the

Chandigarh Administration are on deputation from the States of ei-

19

ther Punjab or Haryana. The officers revert to their parent cadre af-

ter completion of deputation period of approximately three years.

However, the officials continue to work at the Estate Office. Though

the Administration has done commendable work to maintain the

character of Chandigarh as City Beautiful, but the Estate Office has

underbelly, that is, the action of the officials cannot be said to be

bona fide, as is apparent in the present case. It is a typical case of

‘you show me face, I will show the Rule’. On the other hand, the

officers are unable to take decisions which are citizen friendly. Even

no attempt is made to remove the bottlenecks in the working of the

Estate Office.

27.The Division Bench of the High Court of Punjab & Haryana in a

judgment reported as Amritpal Singh v. Chandigarh

Administration

16

, has set aside the requirement of no-objection

certificate from the Chandigarh Administration before affecting sale

of freehold properties. The Chandigarh Administration was directed

to re-examine Rule 17(10) of the 1973 Rules contemplating

unearned increase, as well the restriction to sell the properties

before the expiry of specific years as the root-cause of malice of

Power of Attorneys sales. Similar rule exists as Rule 7 of Chandi-

garh Estate Rules, 2007. The High Court had issued the following

directions:

“(i) That the requirement of ‘No Objection Certificate’ from

the Chandigarh Administration before effecting sale of the

16 2012 SCC OnLine P&H 9310

20

free hold properties is not supported by the Act or the Rules

framed thereunder.

(ii) The Registering Authority is duty bound to examine;

whether the Power of Attorneys are being executed for

consideration. If the Authorities are satisfied that it is for

consideration, the Power of Attorney shall not be registered

unless the proper stamp duty is affixed thereon.

(iii) If the proper stamp duty is not paid on a Power of

Attorney executed on and after 15.11.2007, the Registering

Authority shall refuse to register the document on the basis

of such attorney at any subsequent stage unless proper

stamp duty is affixed thereon in accordance with law.

(iv) The Chandigarh Administration may re-examine Rule

17(10) of the 1973 Rules contemplating unearned increase,

as well the restriction to sell the properties before the

expiry of specific years, as the root-cause of malice of

Power of Attorneys sales.

(v) The Chandigarh Administration to frame Rules to

maintain and update the property records in the manner

mutations are sanctioned in respect of non urban properties

under the Punjab Land Revenue Act, 1887 or such other

procedure, which is fair, reasonable and transparent.”

28.The Full Bench of the High Court in Dheera Singh v. U.T.

Chandigarh Admn. and Ors.

17

noticed that the Executive has

failed to live-up to the expectations of the residents as instead of

approaching the concerned Ministry with a concrete proposal on

data-based information for onward consideration of the Legislature

to rejuvenate the 1952 Act and make it more vibrant and alive to

the issues in presentia or in future, it has gone for ad-hoc solutions

by taking refuge under Section 22 of the Act. The Court held as

under:

“102.Having held that, we cannot refrain from observing

that the 1952 Act may need revamping and updation to

meet the modern day challenges some of which are

incidental to the steep hike in the value of real estate and an

unprecedented pressure of population mounted on

Chandigarh. We are cognizant of the fact that the issue

17 2012 SCC Online P&H 21473

21

whether or not the 1952 Act is in need of suitable

amendments falls exclusively within the domain of law-

makers as the Courts would ordinarily expound the law and

refrain from legislating except in a case of casus omissus.

However, it cannot be overlooked that after enacting a bill

the Legislature becomes functus officio so far as that

particular Statute is concerned. The Legislature may not

have a mechanism of its own to keep track of the

deficiencies or difficulties faced by the executive who has

been assigned the duty to give effect to the enactment and

achieve the legislative object(s). It is the Executive,

therefore, who has an onerous duty to apprise, suggest and

put up before the Legislature a proposal along with facts and

figures justifying the changes that may be brought into an

enactment. Thereafter, it is the absolute and non-justiciable

prerogative of the Legislature to take a decision on such

proposal as per its wisdom.

103.The Executive has in the instant case, with reference

to the 1952 Act, failed to live-up to the expectations of the

residents as instead of approaching the Ministry concerned

with a concrete proposal on data-based information for

onward consideration of the Legislature to rejuvenate the

1952 Act and make it more vibrant and alive to the issues in

prasentia or in future, it has gone for ad hoc solutions taking

refuge under Section 22 of the Act. Strangely, the amount of

penalty or fine fixed by the Legislature in the year 1952

(Sections 8, 13 & 15) has not been got revised even after

the expiry of 60 years.

107.In the light of the interpretation given by us to some

of the provisions of the 1952 Act in paragraphs 81, 82, 84 to

87, 102, 103 & 105 of this order, we also deem it

appropriate to issue the following directions:

(iii) The Union Territory of Chandigarh through its

Administrator shall take steps as may be necessary for

updation of the 1952 Act in the light of the observations

made by us in paragraphs 102, 103 & 105 of this order

before March 31, 2013.”

29.But nothing appears to have been done either in terms of Amritpal

Singh or Dheera Singh. Dheera Singh has laid down the process

of exercising the power of resumption. However, many cases of

22

alleged misuse have been initiated but not concluded by the Estate

Office. The residents of Chandigarh are widely harassed while

seeking no-objection certificate for sale of leasehold property as

the procedure for grant of no-objection certificate and of deposit of

unearned increase is interpreted in different manners by the

different officials, which the officers of the Administration has failed

to control. Another area of concern is the unreasonable procedure

adopted by the Administration for affecting mutation after the

demise of the leaseholder or the allottee and of completing other

formalities at the offices of the appellant. The difficult and near

impossible procedure leads to arbitrary and discriminatory action

by the officials of the Estate Office. Therefore, we direct

Administration to constitute a Committee which may include a

Member of Parliament; an architect; an advocate, who is or has

represented Chandigarh Administration before the High Court; two

representatives of the Municipal Corporation being representatives

of the citizens of Chandigarh, apart from such officers which the

Administration may think fit, so as to review and streamline the

processes of sanction of mutation, grant of occupancy certificate,

no-objection certificate and other citizen-centric requirements

including calculation of unearned profit under the 1973 Rules or

under 2007 Rules.

30.In view of the above, the present appeals are disposed of with the

following directions:

23

a)The appeals are allowed and the orders passed by the DCDRF,

SCDRC and the NCDRC are set aside. The Administration shall

decide the claim of conversion of allottees as on the date when

the consumer complaints were filed. Such action shall be taken

within 3 months;

b)The Administration to give details of the notices for resumption

on account of alleged misuse which are pending consideration.

Such details to include the date of serving of notice of the

alleged misuse and the stage of proceedings pending before the

different officers of Administration. A report to be submitted by

the Administration thereafter in respect of the above directions

within 4 months for perusal and the necessary action, if so

warranted, after four months.

c)To constitute a Committee which may include inter-alia the

Member of Parliament from Chandigarh, an architect, an

advocate who is or had represented Chandigarh Administration

before the High Court, two representatives of the Municipal

Corporation and the officers of Administration.

d)Such abovementioned Committee shall submit report to the

Administrator, Chandigarh Administration preferably within

three months. We hope that the learned Administrator will take

appropriate steps to implement the suggestions made by the

Committee including forwarding of the proposed amendments in

the Statute to the Ministry of Home Affairs, if any, suggested by

the Committee.

24

31.List after 4 months for the Action Taken Report in respect of

directions (b), (c) and (d).

.............................................J.

(HEMANT GUPTA)

.............................................J.

(A.S. BOPANNA)

NEW DELHI;

SEPTEMBER 7, 2021.

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