Haryana Urban Development Authority vs Raje Ram

Haryana Urban Development Authority ... Appellant

Vs.

Raje Ram ... Respondent

[With C.A. No.2382/2003 and CA No.3413/2003]

O R D E R

These appeals by special leave challenge three

identical orders of the National Consumer Disputes

Redressal Commission (`National Commission' for short).

CA No. 2381/2003 [HUDA vs. Raje Ram]

2. Plot No.545, Sector 14, Hissar was allotted to

Madanlal on 12.12.1986. The allottee had deposited 25% of

the cost of the plot. On 15.1.1993, the appellant

notified the revision of price from Rs.224.90 to Rs.301.70

per sq. yard and gave an option to the allottee to either

accept the revision or receive back the initial deposit

with interest at 10% per annum. The allottee and respondent 2

sought transfer of allotment to the name of respondent. The

request was accepted and the appellant re-allotted the plot

to the respondent vide letter dated 15.3.1994 subject to

payment of extension fee. Aggrieved by the non-delivery of

possession of the allotted plot, respondent approached the

District Consumer Disputes Redressal Forum, Hissar in the

year 1997. The appellant contested the claim on several

grounds. The appellant also offered possession of the plot

on 11.3.1998. The District Forum disposed of the complaint

by order dated 15.4.1998, with a direction to the appellant

to pay interest at the rate of 18% per annum to the

respondent on the amounts deposited, from the date of

deposit till the date of offer of possession. The appellant

challenged the award of interest by filing an appeal before

the State Commission. The State Commission did not

interfere with the award of interest, but reduced the rate

of interest from 18% per annum to 15% per annum, by order

dated 5.4.1999.

CA NO. 2382/2003 [HUDA vs. Atam Parkash]

3. Plot No.53, Sector 13P, Hissar was allotted to O.P.

Rathee on 8.4.1986 and the allotment was transferred to one

Sheela Devi. Possession of the plot was offered to her on 3

19.9.1993. On the request of the said Sheela Devi, the

appellant re-allotted the plot to the respondent as per

letter dated 16.6.1997 subject to payment of extension fee.

Alleging that possession of the allotted plot was not

delivered, respondent approached the District Consumer

Disputes Redressal Forum, Hissar, in the year 1997. The

appellant contested the claim. By letter dated 3.11.1997,

the appellant also informed the respondents that possession

of the plot had already been offered to the earlier

allottee in the year 1993. The District Forum by order

dated 14.6.1999 directed the appellant to pay interest at

the rate of 15% per annum to the respondent on the deposit

amount, commencing from the expiry of two years from the

date of deposit till the date of fresh offer of possession.

The District forum also directed that the appellant shall

not charge interest on delayed instalments. The appellant

challenged the award of interest by filing an appeal before

the State Commission. The State Commission reduced the

interest from 15% per annum to 12% per annum by its order

dated 16.5.2000. It may be mentioned that even before the

State Commission decided the matter, the respondent took

possession of the plot on 21.3.2000.

CA No. 3413/2003 [HUDA vs. Sunil Kumar] 4

4. Plot No.1051, Sector 14-P, Hissar was allotted to one

Anjani Kumar on 21.3.1986. By letter dated 5.8.1989, the

appellant offered to refund the deposit if he did not want

to wait till the development was completed. In 1993, the

appellant notified the revision of price which was not

paid. The original allottee sought transfer of allotment to

the name of respondent and the appellant permitted the

transfer on 9.7.1996 and re-allotted the plot to the

respondent by re-allotment letter no.14662 dated 21.8.1996

subject to payment of extension fee. Alleging non-delivery

of possession of the allotted plot, respondent filed

Complaint no.451/1997 before the District Consumer Disputes

Redressal Forum, Hissar, seeking interest on the amounts

deposited, from the date of payment, among other reliefs.

The appellant contested the claim. The District Forum by

order dated 15.4.1998 directed the appellant to pay

interest at the rate of 18% per annum to the respondent on

the amounts deposited from the expiry of two years from the

date of deposit till the date of offer of possession. The

appellant challenged the award of interest by filing an

appeal before the State Commission. The appellant also

offered possession of the plot on 25.11.1998. The State

Commission reduced the interest from 18% per annum to 15% 5

per annum from the date of re-allotment till delivery of

possession, by order dated 10.5.1999.

The common issue

5. The appellants challenged the said orders of State

Commission contending that no interest was payable. The

National Consumer Redressal Commission by its non-speaking

orders dated 27.8.2002, 30.9.2002 and 27.8.2002, disposed

of the said revisions filed by the Development Authority,

in terms of its earlier decision in Haryana Urban

Development Authority vs. Darsh Kumar (Revision Petition

No. 1197/1998 decided on 31.8.2001) by merely observing

that it had upheld the award of interest upto 18% per annum

in similar circumstances. The National Commission did not

refer to or consider the facts of these cases. The said

orders are challenged in these appeals by special leave.

The common issue in all these cases is whether interest

could have been awarded against the appellant, and if so

whether the rate of interest is excessive.

6. The decision of National Commission in Darsh Kumar,

followed in the impugned orders, did not find favour of

this Court in HUDA v. Darsh Kumar - 2005 (9) SCC 449. This 6

Court observed that where possession is given at the old

rate, the party has got the benefit of escalation in price

of land, and therefore, there cannot and should not be

award of interest on the amounts paid by the allottee on

the ground of delay in allotment. On the special facts of

that case, this Court however awarded compensation for

harassment/mental agony.

7. Respondents in the three appeals are not the original

allottees. They are re-allottees to whom re-allotment was

made by the appellant in the years 1994, 1997 and 1996

respectively. They were aware, when the plots were re-

allotted to them, that there was delay (either in forming

the layout itself or delay in delivering the allotted plot

on account of encroachment etc). In spite of it, they took

re-allotment. Their cases cannot be compared to cases of

original allottees who were made to wait for a decade or

more for delivery and thus put to mental agony and

harassment. They were aware that time for performance was

not stipulated as the essence of the contract and the

original allottees had accepted the delay. The appellant

offered possession to respondents (re-allottees) and they

took possession of the respective plots on 27.6.2002,

21.3.2000, and 13.9.1999 respectively. They approached the 7

District Forum in 1997, within a short period from the

dates of re-allotment in their favour. They had not paid

the full price when they approached the District Forum. In

the circumstances, having regard to the principles laid

down by this Court in Ghaziabad Development Authority v.

Balbir Singh - 2004 (5) SCC 65, Darsh Kumar (supra) and

Bangalore Development Authority v. Syndicate Bank - 2007

(6) SCC 711, we are of the view that the award of interest

was neither warranted nor justified.

8. We accordingly allow these appeals and set aside the

impugned orders of the District Forum, State Commission and

National Commission awarding interest. The complaints stand

dismissed.

9. The appellant states that it had paid interest in

pursuance of the State Commission's orders as there was no

order of stay, to the respondents in two of the appeals

(Rs.23308/- was paid to respondent in CA No. 2381/2003 on

14.10.1999 and Rs.70572/- was paid to the respondent in CA

3413/2003 on 13.7.1999). If so, the appellant is entitled

to restitution and it can recover back the amounts paid to

the respective respondent.

8

_________________J.

[R. V. Raveendran]

__________________J [Aftab Alam]

New Delhi;

October 23, 2008.

9

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2383 OF 2003

HUDA ....... Appellant

Vs.

Suresh Kumar Makkar ....... Respondents

O R D E R

The appellant allotted Plot No.1363, Sector 14P,

Hissar to the respondent on 21.8.1986. The respondent paid

the 25% amount on 11.6.1986 and 18.9.1986.

2. The respondent approached District Consumer Disputes

Redressal Forum, Hissar in the year 1995 alleging that plot

was not delivered within 90 days of payment of 25% of the

price and that there was inordinate delay in delivery of

possession; and that he had paid the balance price also in

various instalments between 21.8.1987 to 16.2.1995. He

therefore prayed for a direction to appellant to pay

interest at 24% per annum from the respective dates of

deposit of the price. By order dated 10.3.1998 the District 10

Forum directed payment of interest at the rate of 18% per

annum from the date of deposit of 25% amount till the date

of offer of possession of plot. On appeal by the appellant,

the State Commission by order dated 30.9.1998 reduced the

rate of interest from 18% to 15% per annum and postponed

the commencement of interest by two years from the date of

deposit. On revision by the appellant, the National

Commission passed a common non-speaking order dated

27.8.1982 disposing of the revision in terms of its earlier

decision in Revision Petition No.1197/1998 dated 31.8.2001

[HUDA vs. Darsh Kumar] wherein it had upheld interest even

upto 18% per annum. The said order is under challenge in

this appeal. The appellant contends that it offered

possession of the plot by letter dated 11.6.1999, that it

did not claim the prevailing price of 1999, and that the

respondent has taken delivery of possession of the allotted

plot on 7.10.2003. It therefore contends that respondent is

not entitled to interest on the payments made.

3. The decision in HUDA vs. Darsh Kumar [2005 (9) SCC 449],

relied on by the National Commission was found to be not

sound, by this Court on appeal. In Darsh Kumar (supra), this

Court held that interest at 18% per annum is not to be

granted in all cases, irrespective of the facts of the case 11

and that principles laid down in Ghaziabad Development

Authority vs. Balbir Singh [2004 (5) SCC 65] should be

followed. In Bangalore Development Authority vs. Syndicate

Bank [2007 (6) SCC 711], this Court has further elaborated on

the principles applicable in the event of delay/default. This

Court has consistently held that where possession is given at

the old rate, the allottee gets the benefit of escalation in

price and therefore, not entitled to interest on the amounts

paid, on the ground of delay in allotment. By applying the

said principles, the decision awarding interest cannot be

upheld.

4. The appeal is therefore allowed and the orders of the

consumer fora, awarding interest is set aside. The complaint

stands dismissed.

__________________J [R. V. Raveendran]

_________________J [Aftab Alam] New Delhi;

October 23, 2008 12

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2384 OF 2003

HUDA ....... Appellant

Vs.

Anil Kumar ....... Respondents

[With Civil Appeal No. 3408 of 2003]

O R D E R

The Appellant, by these two appeals by special leave,

challenges two identical non-speaking common orders dated

27.8.2002 of the National Consumer Disputes Redressal

Commission ("National Commission" for short) under which

their two revisions have been disposed of.

CA No. 2384 of 2003

2. The respondent is a re-allottee of Plot No.120, Sector

13, Bhiwani re-allotted by appellant to respondent on 13

4.12.1992. It is stated that as against the total cost of

Rs.1,17,480/-, the respondent had paid Rs.1,03,213/- from

time to time. The respondent approached the District Consumer

Disputes Redressal Forum, Bhiwani in 1996, for refund of the

amount deposited by him, with interest at 18% per annum,

Rs.10,000/- for mental agony and Rs.50,000 as damages,

alleging inordinate delay in delivery of possession of the

allotted plot and that it was no longer interested in the

allotment. During the pendency of the complaint, the

respondent claims to have deposited two further sums -

Rs.14,685/- and Rs.50,000/- with the appellant. The District

Consumer Disputes Redressal Forum, by order dated 29.7.1999

noted that the appellant had not delivered the plot even

after the expiry of six and half years, and directed refund

of the sum of Rs.1,67,898/- deposited by the respondent, with

interest at the rate of 15% per annum from the respective

dates of deposit till date of re-payment, plus Rs.2,000/- for

mental agony and Rs.500/- towards costs. The appeal filed by

the appellant was dismissed by the State Consumer Redressal

Commission by a brief order dated 29.10.1999. The Revision

filed by the appellant was disposed of by the National

Commission by a non-speaking order dated 27.8.2002 merely

stating that it was disposing of the revision in terms of its

decision in Haryana Urban Development Authority vs. Darsh 14

Kumar (Revision Petition No.1197/1998 dated 31.8.2001)

wherein it had upheld the award of interest even at 18% per

annum. The said order is challenged in this appeal by special

leave.

CA No. 3408 of 2003

3. The appellant had allotted plot No. 2223 in Sector 23,

Sonepat to the respondent on 9.6.1991. The respondent

claims to have paid a sum of Rs. 1,88,353/- towards the

cost of plot. In view of the delay in delivery of

possession, the respondent informed the appellant that it

was not interested in the allotment and requested for

refund. The appellant appears to have refunded the amount

paid towards the plot after forfeiting 10% of the total

price. Feeling aggrieved, the respondent approached the

District Consumer Forum, Panchkula in December 1997

contending that 10% of the price could not be forfeited, as

there was no breach on his part and as the delay was on the

part of the appellant. The District Forum allowed the

claim of the respondent and issued the following directions

to the appellant: (i) to refund the sum of Rs. 23,000/-

(deducted/forfeited from the price paid); (ii) to pay

interest/compensation at 18% per annum on Rs. 1,88,353/- 15

from the date of deposit till date of payment (iii) not to

deduct any Income tax on the interest/compensation; (iv) to

pay Rs. 1000/- as litigation costs.

4. On appeal filed by the appellant, the State Consumer

Disputes Redressal Commission by its order dated 28.9.1999

held that the appellant was entitled to forfeit 10% of the

total price on account of respondent opting out of the

allotment. It also reduced the interest payable by

appellant on the amount to be refunded to 15% per annum.

Feeling aggrieved, by the rate of interest awarded, the

appellant filed a revision before the National Commission.

The respondent did not challenge the decision on the

forfeiture of 10% of total price. The revision filed by the

appellant was disposed of by the National Commission by a

non-speaking common order dated 27.8.2002 by which it

purported to dispose of the revision in terms of its

decision in Haryana Urban Developemnt Authority v. Darsh

Kumar (Revision Petition No. 1197 of 1998 decided on

31.8.2001) wherein it had upheld award of interest at 18%

per annum. The said order is challenged in this appeal by

special leave. The appellant alleges that during the

pendency of the revision before the National Commission, it

had paid the interest.

16

Common issue

5. The decision in HUDA vs. Darsh Kumar [2005 (9) SCC 449],

relied on by the National Commission was found to be not

sound, by this Court on appeal. In Darsh Kumar (supra), this

Court held that interest at 18% per annum is not to be

granted in all cases, irrespective of the facts of the case

and that principles laid down in Ghaziabad Development

Authority vs. Balbir Singh [2004 (5) SCC 65] should be

followed. This Court has further elaborated on the principles

applicable in the event of delay/default, in Bangalore

Development Authority vs. Syndicate Bank [2007 (6) SCC 711].

By applying the said principles, the finding that the amounts

paid by the allottees should be refunded as the allotted plot

was not delivered, appears to be correct and is not open to

challenge. But the decision awarding interest at 18% or 15%

per annum cannot be upheld. On the facts and circumstances we

are of the view payment of interest at 10% per annum would

meet the ends of justice.

6. We, therefore, allow these appeals in part and reduce

the rate of interest payable by the appellant to 10% per

annum from the respective dates of payment to date of 17

repayment. The other parts of the order of the State

Commission affirmed by National Commission relating to

refund, is not disturbed.

7. If the appellant has already refunded the amount paid by

the respondent in terms of the orders of the Commission, but

has paid interest at higher rate, it is entitled for

return/restitution in regard to such excess in terms of this

order.

__________________J [R. V. Raveendran]

__________________J [Aftab Alam] New Delhi;

October 23, 2008 18

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.3411 OF 2003

Haryana Urban Development Authority ... Appellant

Vs.

Inderjeet Kochhar ... Respondent

O R D E R

The learned counsel for the appellant seeks leave to

withdraw the appeal.

The appeal is dismissed as withdrawn.

__________________J.

[R. V. Raveendran]

___________________J.

[Aftab Alam]

New Delhi;

October 23, 2008.

19

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3409 OF 2003

HUDA ....... Appellant

Vs.

Diwan Singh ....... Respondents

O R D E R

Plot No. 2163P in Sector 13, Bhiwani was allotted by

the Appellant in the year 1990, and on the request of the

original allottee, it was re-allotted to the respondent by

the appellant on 21.4.1998. In the year 1999, respondent

approached the District Consumer Disputes Redressal Forum,

Bhiwani, alleging that in spite of payment of the full

price, the appellant had failed to deliver possession, on

account of non-completion of development. He therefore

sought three reliefs. First, a direction to the appellant

to pay interest at 24% per annum on the amounts deposited,

till the date of delivery of possession (after removing the

road laid over a part of the plot). Second was for a

direction to the appellant not to charge any extension fee

after 1994 or any interest on the extension fee. Third was 20

for payment of compensation of Rs.1,00,000/- for harassment

and suffering. The appellant resisted the claim on several

grounds and also alleged that it had offered possession in

1994 and again in May 1998. The District Forum by its

order dated 10.8.1999 accepted the contention of the

respondent that there was no effective offer of delivery of

possession in May 1998 and awarded interest at 18% per

annum on the amounts deposited, with effect from the date

commencing on the expiry of two years from the date of

deposit, till date of fresh offer of possession with a

further direction to the appellant not to charge interest

on the extension fee. The prayer for compensation for

suffering/mental agony was rejected.

2. The appeal filed by the appellant was dismissed by the

State Consumer Disputes Redressal Commission on 21.9.1999

by a non-speaking order on the ground that there was no

merit in the appeal. It assumed that District Forum had

awarded interest at the rate 15% per annum and there was

nothing wrong in it. During the pendency of the appeal, the

appellant claims to have made a fresh offer of possession

on 13.9.1999. According to it, the respondent did not take

possession.

21

3. The appellant challenged the order of the State

Commission in a Revision filed before the National Consumer

Disputes Redressal Commission. The National Commission by a

non-speaking order dated 27.8.2002 disposed of the Revision

Petition in terms of its decision in HUDA v. Darsh Kumar

(Revision petition No. 1197 of 1998) wherein it had upheld

the award of interest even at 18% per annum.

4. The respondent has not surrendered the allotment nor

sought refund of the amounts deposited. The reliefs sought in

the complaint before the District Forum were only in regard

to claim for interest on the payments made and not for refund

of the amount paid towards price. It is thus to be inferred

that respondent is still interested in the plot. The

appellant has again offered to deliver possession in

September, 1999. It is open to the respondent to take

possession.

5. The only issue raised by the appellant in this appeal is

in regard to interest. It is pointed out that direction for

payment of interest at 18% per annum is contrary to the

decisions of this Court.

22

6. One significant aspect to be noticed is that respondent

is not the allottee who was allotted the plot in 1990, but a

re-allottee who was re-allotted the plot in April 1998. When

he was offered possession of the plot in May 1998, he found

that a part of it was used for purposes of road. Thereafter,

the appellant even offered an alternative plot. The

respondent however rushed to the District Forum in 1999,

hardly within a year of re-allotment. The allegations of

inordinate delay, negligence, harassment on the part of

appellant, in a complaint filed by a re-allottee, within one

year of re-allotment, appears to be hollow and without merit.

In this factual background, having regard to the principles

laid down in Ghaziabad Development Authority vs. Balbir Singh

[2004 (5) SCC 65], Haryana Urband Development Authority vs.

Darsh Kumar [2005 (9) SCC 449] and Bangalore Development

Authority vs. Syndicate Bank [2007 (6) SCC 711], the award of

interest was not warranted. A re-allottee in 1998 cannot

obviously be awarded interest from 1992 on the amounts paid

by the original allottee in 1990 on the ground that the

original allottee was not offered delivery in 1990.

7. We therefore allow this appeal and set aside the orders

of the consumer fora below. The complaint is rejected. 23

__________________J [R. V. Raveendran]

_________________J [Aftab Alam] New Delhi;

October 23, 2008