Vs. Prem Kumar Agarwal & Anr.  Insc 45 (17 January 2008)
Arijit Pasayat & P. Sathasivam
out of SLP (C) 7650 OF 2004) Dr. ARIJIT PASAYAT, J.
Challenge in this appeal is to the order passed by the National Consumer
Disputes Redressal Commission, New Delhi (in
short the Commission). The issue before the Commissioner which was
considered in the Revision Petition of the appellant was as follows.
the possession of the plot originally allotted in a particular sector could not
be given to the allottee for any reason for no fault of his and HUDA (Haryana
Urban Development Authority) is required to allot an alternative plot in lieu
thereof in any other sector, what price HUDA is to charge for the alternative
plot allotted in the different sector.
Commission was considering various cases and the case of HUDA v. R.P. Chawla
(Revision Petition Nos.17-18 of 1997) was taken as an illustrative case.
Ultimately, the Commission came to hold as follows:
issue before us is the allotment of alternative plot. It is also to be seen
that if for no fault of the allottee, he is deprived of his plot allotted to
him and in lieu of that he is allotted some other plot in the same or any other
sector he cannot be asked to pay the price over and above of original plot
which he will have to pay. In this case allottee would be entitled to interest
@ 18% per annum. The interest amount shall however be payable from the date of
respective deposits of the amounts.
of interest fixed by the Commission is under challenge.
Learned counsel for the appellant has submitted that in several cases this
Court has held that a fixed rate of interest of 18% is high.
There is no appearance on behalf of respondents in spite of service of notice.
7. In Ghaziabad
Development Authority v. Balbir Singh [2004(5) SCC 65] it was inter alia
observed as follows:
However, the power and duty to award compensation does not mean that
irrespective of facts of the case compensation can be awarded in all matters at
a uniform rate of 18% per annum. As seen above, what is being awarded is
compensation i.e. a recompense for the loss or injury. It therefore necessarily
has to be based on a finding of loss or injury and has to correlate with the
amount of loss or injury.
the Forum or the Commission must determine that there has been deficiency in
service and/or misfeasance in public office which has resulted in loss or
injury. No hard- and-fast rule can be laid down, however, a few examples would
be where an allotment is made, price is received/paid but possession is not
given within the period set out in the brochure.
Commission/Forum would then need to determine the loss. Loss could be
determined on basis of loss of rent which could have been earned if possession
was given and the premises let out or if the consumer has had to stay in rented
premises then on basis of rent actually paid by him. Along with recompensing
the loss the Commission/Forum may also compensate for harassment/injury, both
mental and physical. Similarly, compensation can be given if after allotment is
made there has been cancellation of scheme without any justifiable cause.
has been set out hereinabove, the National Forum has been awarding interest at
a flat rate of 18% per annum irrespective of the facts of each case. This, in
our view, is unsustainable. Award of compensation must be under different
separate heads and must vary from case to case depending on the facts of each
The National Forum in the lead judgment has considered the authorities of this
Court in the case of Ghaziabad Development Authority v. Dhanesh Chand Goel and
the case of Haryana Urban Development Authority v. Rajnish Chander Sharda. From
these decisions, the National Forum has concluded that award of interest at the
rate of 18% per annum on amount deposited by the allottee where there is a
delay in handing over possession is reasonable and could be awarded on
equitable grounds. In our view, this conclusion of the National Forum is not
correct. In Dhanesh Chand Goel case the facts were gross. Those facts have been
set out in the order of the National Forum itself. Those facts show that GDA
started a scheme for allotment of houses in Governdpuram.
Chand had applied for allotment. He had paid the amount. He had been intimated
on 16-11-1993 that he had been allotted a house,
as per the draw held on 20-10-1993.
in 1996 he was informed that there was an increase in the price. He did not pay
the increased amount and therefore possession was not given to him. It appears
that the flat which had been allotted to him was thereafter allotted to one Shanti
Suraksha Bal. Shri Dhanesh Chand was asked to give his option for allotment in
some other scheme at a different place. It is under those circumstances that
refund was directed with interest at the rate of 18% per annum. This Court
while dismissing the special leave petition was careful enough to record that
the rate of 18% interest per annum was reasonable given the facts recorded by
the lower authority. Thus, this case shows that if the facts are gross then 18%
interest could be given but the Forum must first conclude that the facts
justify grant of interest at such a rate. Similarly, in Rajnish Chander Sharda
case the facts were such that they justified a grant of interest at the rate of
18% per annum.
Court has noted that there was delay in delivery of possession and in the
meantime the complainant had been compelled to live in rented accommodation and
pay Rs.1600 per month. This Court has noted that interest at 18% was given
instead of directing the body to compensate for the loss caused i.e. at the
rate of Rs.1600 per month. It is on those facts that this Court upheld the
grant of interest @ 18% per annum. Far from showing that these authorities
justify grant of interest at 18% in all cases irrespective of the facts, the
authorities of this Court clearly indicate that interest at such rate is to be
granted only when the facts so justify.
That brings us to the question as to the date from which interest would be
in cases of refund interest will be payable from the date the monies were
deposited with the body till they are returned either by payment to that party
or deposited in a court. In cases where compensation is directed to be paid,
the Commission/Forum must direct payment within a particular period and further
direct that if payment is not made within that time the authority will also pay
interest. Such interest must be based on the current rate of interest.
clarify that in all cases where interest has already been paid @ 18%
irrespective of the above order, the authority will not be entitled to call
upon the party to refund the amount which has already been paid. (underlined
8. In para
19 quoted above it was held that such rate of interest has to be based on
current rate. Considering the fact that by order dated 26.4.2004, we had
directed stay of the amount payable beyond 12%, the respondent would be
entitled to interest at the rate of 12% instead of 18% as fixed by the
appeal is allowed to the aforesaid extent. No costs.