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CASE NO.: Appeal (civil)  469 of 2008

PETITIONER: H.U.D.A.

RESPONDENT: Prem Kumar Agarwal & Anr.

DATE OF JUDGMENT: 17/01/2008

BENCH: Dr. ARIJIT PASAYAT & P. SATHASIVAM

JUDGMENT: J U D G M E N T (Arising out of SLP (C) 7650 OF 2004) Dr. ARIJIT PASAYAT, J.

1.      Leave granted.       

2.      Challenge in this appeal is to the order passed by the  National Consumer Disputes Redressal Commission, New  Delhi (in short the \021Commission\022).  The issue before the  Commissioner which was considered in the Revision Petition  of the appellant was as follows.

       \023When 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.\024

3.      The 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:

\023The 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.\024

4.      Rate of interest fixed by the Commission is under  challenge.       5.      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.

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     6.      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: \0238.  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.  Thus 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.  The 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.

xxx                    xxx                             xxx    10.     As 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  case.  

xxx                    xxx                             xxx    12.     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

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the order of the National Forum itself. Those  facts show that GDA started a scheme for  allotment of houses in Governdpuram.  Dhanesh 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.  Thereafter 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.  This 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.  19.     That brings us to the question as to the  date from which interest would be payable.  Normally 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.  

xxx                    xxx                             xxx    24.     We 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.\024

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                                       (underlined for emphasis)

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 Commission.       9.      The appeal is allowed to the aforesaid extent. No costs.