In a recent shocking decision (II(2009) CPJ 1 (SC)), the Supreme Court has held that buyers of auction sites from Urban Development Authorities are not consumers.
In its order, the Supreme Court said that only allottees of sites are consumers but not buyers of sites (whether by auction or not) from the UDAs. It also said that when people buy sites from UDAs, if amenities such as roads, water connections and sewage lines are not specifically promised, the UDAs are under no obligation to provide them.
This decision which will negatively affect thousands of auction site buyers throughout the country seems flawed. It is not clear why selling of sites by allotment is considered a service which is covered by the Consumer Protection Act while selling of sites by auction is not considered a service covered by CPA. Now, as a result of the latest Supreme Court order, people who pay a much higher market value for auction sites have no rights while people who pay a lower subsidized price for allotted sites are given the right to approach consumer courts for deficiency of service.
There is a problem with the second part of the judgment also. Previous decisions of the Supreme Court have held that the provisions of the CPA have to be interpreted in favour of the consumer since CPA is a benefit-oriented legislation. The present judgment goes against the spirit of these earlier judgments. Provision of civic amenities is a monopoly of the UDAs. When people buy sites from the UDAs, they assume reasonably that the sites are provided with basic amenities and if the UDAs do not provide these amenities, they should not be allowed to hide behind the excuse that they never promised them explicitly. The Court must have made the UDAs more accountable by ruling that unless the UDAs specify explicitly that they are not providing amenities such as roads, water connections and sewage lines, they are bound to provide them for all sites whether allotted or sold by auction.
Most countries in the world have accepted that "Buyer Beware" has now been replaced by "Consumer Is The King". The latest Supreme Court order tries to undo this.
Prof. S.K. Ananda Thirtha, Working President, Mysore Grahakara Parishat