Shanker Pandey Vs. Union of India &
Ors  Insc 141 (15 February 2007)
S. B. Sinha & Markandey Katju
MARKANDEY KATJU, J.
This appeal has been filed against the order passed by the Monopolies and
Restrictive Trade Practice Commission, New Delhi (hereinafter referred to as
"the Commission") dated 13.9.2004 in C.A.
No.193 of 2001.
Heard learned counsel for the parties and perused the record.
The case of the appellant is that after applying for a flat under the
"Indira Puram Housing Scheme" in the year 1994, a reservation letter
dated 30th March, 1994 was received by him and he was asked to pay seven
installments on the specified dates. The amount as well as the dates on which
the installments were to be paid was mentioned therein.
The applicant started paying the installments as demanded.
Subsequently, he opted out for a HIG flat, which was also allotted to him
vide letter dated 17th May, 1994. No additional demand was asked for in the
second letter. The installments were duly paid as demanded.
Thereafter, nothing was heard from the respondent side for almost five
years. After finding that there is no likelihood of the flat to be made
available to him in the near future, the applicant was left with no alternative
but to demand his amount paid along with interest at the rate of 21% per annum.
The amount was refunded to the applicant in the year 2001 without any interest
as asked for. The applicant thus suffered losses on account of unfair trade
practices adopted by the respondent, hence he sought compensation from the
respondent by filing an application under Section 12B of the Monopolies and
Restrictice Trade Practices Act, 1969 (hereinafter referred to as "the
In response to the notice issued under Section 12B of the Act, the
respondent filed its reply. The defence of the respondent was that as the full
payment of Rs.6,64,000/- (estimated cost) as indicated in the reservation
letter was not paid, the possession of the flat was not handed over to him. The
refund as requested, on the other hand was issued to him promptly. There was no
deficiency of service as alleged in the application and as such the
Compensation Application should be dismissed.
It is not disputed that the installments as mentioned in both the
reservation letters, were paid on the specified dates as indicated therein.
It is also not disputed that though the estimated cost was indicated at
Rs.6,64,000/-, the same was not worked out till the year 1998 when the first
camp was held, in respect of allotment of such flats. The respondent also made
no efforts to issue demand letters in respect of the remaining amount
subsequent to the year 1995 when the last installment was paid. On the other
hand, the applicant was given an assurance that the possession of the flat
would be given to him in the near future. The applicant, therefore, had no
alternative but to ask for refund of the amount as deposited. The respondent on
its side has no explanation for either not demanding the remaining amount or
handing over the possession of the flat. Even the averments of the applicant
that the house is not yet ready has not been strongly refuted. Thus it is a
clear case of deficiency of services on the part of the respondent. As a result
of such unfair trade practices, the applicant has not only been deprived of
return on his investment made with the respondent authority but also the
possession of the flat promised to him.
Considering the above facts, the Commission directed the respondent to pay
12% per annum interest on the installments from the dates of the payment till
the date of refund. This appeal has been filed claiming interest at a higher
Learned counsel for the appellant Shri Parag P. Tripathi referred to various
decisions in which this Court has granted higher rate of 1994 Supp.(1) SCC 644.
We are of the opinion that there is no hard and fast rule about how much
interest should be granted and it all depends on the facts and circumstances of
the each case. We are of the opinion that the grant of interest of 12% per
annum is appropriate in the facts of this particular case. However, we are also
of the opinion that since interest was not granted to the appellant along with
the principal amount the respondent should then in addition to the interest at
the rate of 12% per annum also pay to appellant interest at the same rate on
the aforesaid interest from the date of payment of installments by the
appellant to the respondent till the date of refund on this amount, and the
entire amount mentioned above must be paid to the appellant within two months
from the date of this judgment.
It may be mentioned that there is misconception about interest.
Interest is not a penalty or punishment at all, but it is the normal
accretion on capital. For example if A had to pay B a certain amount, say 10 years
ago, but he offers that amount to him today, then he has pocketed the interest
on the principal amount. Had A paid that amount to B 10 years ago, B would have
invested that amount somewhere and earned interest thereon, but instead of that
A has kept that amount with himself and earned interest on it for this period.
Hence equity demands that A should not only pay back the principal amount but
also the interest thereon to B.
With these observations the impugned judgment is modified and the appeal is
disposed of accordingly.