Deficiency in service to be compensated: SC
Wednesday, April 02, 2008; Posted: 02:50 AM
Apr 01, 2008 (Asia Pulse Data Source via COMTEX): The Supreme Court in Karnataka Industrial Areas Development Board, Appellant Versus Nandi Cold Storage Pvt. Ltd., Appellant partly allowed the appeal by reducing the compensation order to be paid from Rs. 3,00,000 to Rs. 1,00,000 only.
Justice Dr. Arijit Pasayat in a judgment also on behalf of Justices P.K. Balasubramanynan and D.K. Jain said the challenge in this appeal was to the order passed by the National Consumer Disputes Redressal Commission at New Delhi (in short the “National Commission”). Respondent had filed a complaint against the appellant before the National Commission.
Justice Dr. Pasayat said background facts in a nutshell were as follows: In the complaint respondent inter alia stated that the complainant company, desirous of opening a cold storage unit in the State of Karnataka, applied for allotment of land to the appellant in August 1991.
After meeting all the formalities required from time to time by the appellant, a plot bearing No. 2 of Chickballapur Industrial Area, measuring 2.5 acre of land, was allotted for setting up a cold storage. Possession certificate was issued on 26/30.8.93. The complainant also in the meantime obtained a loan of Rs. 67 lakh from the Karnataka State Financial Corporation (in short “KFC”).
For the first time in August 1994, a letter was written by appellant to the complainant? The company could not go ahead with construction activity on the plot No. 2 covered in Sy. No. 29 and 30 of Jadalathimmanahally Village has obtained stay order from the High Court of Karnataka in a writ petition challenging the acquisition proceedings.
The Board initiated action for vacating the stay order granted by the High Court of Karnataka. However, the company could not go ahead with implementation in view of the stay order granted by the High Court.
The complainant sought for permission to go ahead with implementation after the litigation in respect of the above land is disposed of by the High Court. Justice Dr. Pasayat said original land holder took back possession forcibly in view of the order of the Karnataka High Court.
The writ petition filed by the original land holder was allowed by the High Court leaving the complainant high and dry without land, more so when in September 1994, the KFC cancelled the term loan in view of the fact that no progress was made in the implementation of the project. Justice Dr. Pasayat said since the complainant was keen to go ahead with the project, on collecting some information, it approached the appellant to allot plot No. 1-A and 1-B which was lying vacant, which were allotted to the complainant.
Justice Dr.Pasayat said it seems that bad luck had not stopped chasing the complainant. As soon as the allotment in respect of plot no. 1-A and 1-B were made on a resumed plot, the original allottees moved the High Court making the complainant a party before it, but however, after protracted litigation, the writ petition was dismissed but in the meanwhile the loans had been cancelled and the complainant was left high and dry and it is in these circumstances that a complaint was filed alleging deficiency in service.
Justice Dr.Pasayat said the appellant-Board appeared before the National Commission on issue of notice. It took the stand that there was no deficiency in service and it acted in terms of the procedure and down in Karnataka Industrial Area Development Act, 1966 (in short the “Act”) and Rules made thereunder.
Justice Dr. Pasayat said the Board had submitted that the State Government had acquired the land and handed over the same to the present appellant for development and allotment for setting up the industries and the acquisition was done by the State Government. It added after the land was handed over, same was developed and allotted to various entrepreneurs.
Justice Dr. Pasayat said the counsel had also submitted that since the appellant came to know about the pendency of the litigation between the Government and the original landholder of plot No. 2 it had given notice to the complainant and all that was required to be done for the complainant was done. There was no deficiency in the service by the Government which had acquired the land from the appellant after such acquisition according to the Board.
Justice Dr. Pasayat said after hearing counsel for the parties the National Commission held that the appellant was clearly at fault as there was deficiency in service according to it and therefore it was held that the complaint was to be allowed. Considering the facts and circumstances of the case the National Commssion held that the complainant was entitled to compension of Rupees three lakhs.
Justice Dr. Pasayat said in support of the appeal, it was submitted that there was no deficiency in service in view of what has been stated above and therefore in any event, there was no scope for awarding compensation. He added that the Counsel for the Respondent on the other hand supported the order of the National Commission. Justice Dr. Pasayat said while issuing notice, the same was limited to the question of compensation.
In support of the appeal, Counsel for the appellant submitted that there is no deficiency in service and all possible steps had been taken at different points of time. Justice Dr. Pasayat said that the Counsel also submitted that in a hypothetical case which was not established, the National Commission erroneously came to hold that it was a case of deficiency in service.
Justice Dr. Pasayat said the only question before the apex court was regard to the quantum of compensation awarded. Considering the peculiar circumstances of the case, he was fixing the same to be rupees one lakh. This was to be paid to the appellant by the respondent within 4 weeks and the appeal was being allowed in the aforesaid circumstances.