Supreme Court Sets Aside 28-Year-Old Claim, Holds That Defaulting Allottees Cannot Seek Possession After Prolonged Delay; Mandates Fresh Auction for Plot Allocation to Ensure Transparency and Compliance

Court’s Decision:

The Supreme Court, in a detailed judgment, set aside the orders of the State Consumer Disputes Redressal Commission (State Commission) and the National Consumer Disputes Redressal Commission (National Commission). The Court concluded that the respondent, who defaulted on payment obligations, could not be granted possession of the plot after a prolonged delay of 28 years. It directed the Indore Development Authority to issue a fresh tender for the plot and ensure that the allotment process strictly adheres to auction or due process, as mandated by the rules.

Facts:

1. Background of the Allotment:
   In 1994, the Indore Development Authority issued a public notice inviting tenders under Scheme No. 54 for allotment of plots. The respondent was allotted Plot No. 314 on January 2, 1995, subject to specific payment terms. These included a 50% upfront premium within 30 days of allotment and the remaining 50% in 12 quarterly installments.
2. Respondent’s Default:
   The respondent initially deposited the first installment but failed to pay the remaining installments within the stipulated timeline. Consequently, the Indore Development Authority canceled the allotment on March 22, 2000.
3. First Round of Litigation:
   Aggrieved by the cancellation, the respondent approached the Madhya Pradesh High Court, which, in 2006, restored the allotment and directed the respondent to pay the outstanding dues within 30 days. The respondent, however, deposited only a partial amount of ₹5,72,782 against the total outstanding dues of ₹12,02,592. This led to further disputes.
4. Reduced Demand and Consumer Complaints:
   In response to the respondent’s request, the appellant reduced the outstanding amount to ₹11,04,948, payable by February 28, 2009. The respondent failed to pay even the revised amount and instead filed a consumer complaint before the District Consumer Forum, which dismissed his case in 2015.
5. Subsequent Litigation:
   The respondent appealed before the State Commission, which, through an interim order in 2017, directed the appellant to accept the outstanding amount with interest and hand over possession of the plot. This interim order effectively granted final relief. The appellant challenged this before the National Commission, which upheld the respondent’s claim, directing the authority to calculate interest and deliver possession within three weeks.

Issues:

1. Whether the respondent, who defaulted on agreed payment terms, could claim possession of the plot after a delay of 28 years.
2. Whether the State and National Commissions were justified in granting relief despite the respondent’s consistent non-compliance and delay.

Petitioner’s Arguments:

The Indore Development Authority submitted the following:

• The respondent defaulted on the original and revised payment terms despite multiple extensions and concessions, including interest reductions.
• Both Commissions overstepped their jurisdiction by granting relief that disregarded the lapse of time and the respondent’s repeated defaults.
• Any further relief would set a precedent detrimental to public policy and administrative efficiency.

Respondent’s Arguments:

The respondent argued that:

• The delays were partly attributable to the procedural lapses and conduct of the appellant.
• Earlier court orders and Commission decisions entitled him to the relief sought, especially considering the reduced amount demanded by the appellant.

Analysis of the Law:

1. Consumer Protection Act, 1986:
   The respondent invoked provisions under this Act to challenge the appellant’s demands. However, forums under this Act are bound by principles of equity and cannot overlook fundamental defaults or delay.
2. Contractual Obligations:
   The initial allotment terms were clear and binding. The respondent’s failure to adhere to these terms, even after multiple concessions, invalidated his claim.
3. Doctrine of Laches:
   The Court emphasized that claims pursued after an unreasonable delay—especially when the claimant is at fault—cannot be entertained. The respondent’s default and subsequent legal strategies amounted to abuse of the judicial process.

Precedent Analysis:

The judgment underscored established principles:

• Relief cannot be granted to a party guilty of prolonged delay and persistent default.
• Consumer forums and other judicial bodies must avoid granting relief that contravenes contractual terms or compromises administrative integrity.

The Court distinguished this case from precedents where delays were justified by procedural complexities or third-party failures, holding that the respondent’s inaction was the primary cause of delay.

Court’s Reasoning:

1. The respondent’s default in payment, despite multiple extensions and a reduced demand, invalidated his claim to the plot.
2. The State Commission’s interim order granting final relief was procedurally flawed.”Final relief could not have been granted by the State Commission on an interlocutory application filed in the matter.”
3. The National Commission compounded this error by upholding the State Commission’s order, overlooking both the respondent’s defaults and the extraordinary delay.”In respect of NIT/advertisement issued on 05.10.1994, no such order could have been passed… after a lapse of period of 28 years.”

Conclusion:

The Supreme Court allowed the appeal, setting aside the orders of the State and National Commissions. It directed the Indore Development Authority to:

• Issue a fresh tender for the plot.
• Allot the plot through auction or due process, ensuring transparency and compliance with rules.

Implications:

This judgment reinforces:

1. The necessity for timely compliance with contractual obligations.
2. Judicial disapproval of undue delays and procedural abuse.
3. The importance of transparency and adherence to rules in public resource allocation.

The decision serves as a precedent discouraging prolonged litigation tactics and upholding the sanctity of administrative and contractual processes.

Also Read – Supreme Court Upholds Conviction for Rash and Negligent Driving Causing Death, Replaces Jail Term with Compensation Due to 11-Year Delay and Mitigating Circumstances