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CASE NO.: Appeal (civil)  1598 of 2005

PETITIONER: Alok Shanker Pandey

RESPONDENT: Union of India & Ors

DATE OF JUDGMENT: 15/02/2007

BENCH: S. B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T

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  Act").

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

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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 rate.

Learned counsel for the appellant Shri Parag P. Tripathi referred  to various decisions in which this Court has granted higher rate of  interest e.g. Renusagar Power Co. Ltd.  Vs.  General Electric Co.  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.