The Chief Officer, Nagpur Housing and Area Development Board (A Mhada Unit) and Others vs Manohar Burde

2025 INSC 398 NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. of 2025 SPECIAL LEAVE PETITION (CIVIL) NO. 3802 OF 2024

THE CHIEF OFFICER, NAGPUR HOUSING AND AREA DEVELOPMENT BOARD (A MHADA UNIT) AND OTHERS …APPELLANT(S)

VERSUS

MANOHAR BURDE …RESPONDENT(S)

JUDGMENT

Aravind Kumar, J.

1. Leave granted.

2. Heard learned counsels appearing for the parties. In the present appeal, the

order dated 29.01.2024 passed by the High Court of Judicature at Bombay,

Nagpur Bench at Nagpur in Writ Petition No. 5052 of 2022, whereby the Writ

Petition came to be allowed, and order dated 27.07.2022 passed by the National

Consumer Disputes Redressal Commission (herein after referred to as Signature Not Verified

“NCDRC” in short) in Appeal No. 796 of 2019 came to be quashed, is being Digitally signed by NIDHI AHUJA Date: 2025.03.26 17:15:48 IST Reason:

questioned. The parties are referred to as per their rank in the High Court.

1

3. The facts in brief leading to filing of this appeal are as under –

The Respondents launched a Group Housing Project in year 2009. Pursuant

to the same, the petitioner applied for a 3 BHK flat and deposited the requisite

amount of Rs. 4,00,000/- on 23.09.2009 and by virtue of lottery drawn on

03.01.2010, petitioner was allotted a flat. In furtherance of the allotment, the

petitioner had to pay the balance consideration in eight (8) instalments, out of

which he deposited seven (7) instalments between 31.12.2011 to 31.03.2013 and

the eighth (8th) instalment was deposited on 26.08.2013 on the assurance that

possession of flat will be delivered timely. The prime grievance of the petitioner

is two-fold, firstly, the delivery of possession of the flat was delayed and

secondly, demand of additional amount posing the threat of cancellation of

allotment. The said amount was paid by the petitioner, however in vain, it did not

yield any result or possession of the flat was delivered to the petitioner.

Hence, alleging deficiency in service and unfair trade practice, the

petitioner filed a complaint before the State Consumer Disputes Redressal

Commission (in short “SCDRC”), which came to be allowed vide order dated

20.02.2017 with a direction to the authorities to deliver possession within six (6)

months and to pay interest @ 15% p.a. for the period of delay w.e.f. July 2013 till

handing over of possession. The same was challenged by the respondents in First

Appeal No. 1741 of 2017 and the case was remitted to the SCDRC for

adjudication on merits afresh.

2

4. On remand, the SCDRC by order dated 07.02.2019 partly allowed the

complaint and directed the respondent to complete the construction of the allotted

flat along with a direction to Respondent Nos. 1, 2 & 3 therein to pay interest @

15% p.a. to the complainant for the delayed period w.e.f. 01.07.2013 till delivery

of the possession of flat on the amount paid by the complainant. It was further

ordered that, in the event construction is not completed, the amount paid by the

complainant should be refunded along with interest @ 15% p.a. from the date of

respective payments till realization along with compensation of Rs. 10,00,000/-

towards loss suffered by him; and, Rs. 1,00,000/- towards physical and mental

harassment along with Rs. 25,000/- towards litigation cost.

5. The respondents being aggrieved, preferred appeal before NCDRC which

was partly allowed by order dated 27.07.2022 and respondents were directed to

refund the entire amount deposited by the complainant with interest @ 9% p.a.

against interest @ 15% as directed by SCDRC. The NCDRC also directed

payment of Rs. 50,000/- as consolidated costs. The respondents filed a review

being R.A. No. 180 of 2022 seeking review of the order dated 27.07.2022, which

was also dismissed by NCDRC vide order dated 26.08.2022.

6. The respondents being aggrieved by the orders dated 27.07.2022 and

12.08.2022, filed Special Leave Petition (C) No. 25157 of 2023 before this Court,

which stood dismissed by order dated 06.11.2023.

3

7. However, being aggrieved by the aforesaid order dated 27.07.2022, the

petitioner (complainant) filed W.P. No. 5052 of 2022 before the High Court of

Judicature at Bombay, Nagpur Bench, which was allowed vide impugned order

setting aside the order passed by the NCDRC and granting the reliefs as sought

in the Writ Petition.

8. The High Court opined that there was delay on the part of the respondent

in not completing the construction within the agreed period and there has been

delay at all stages. It also took note of the fact that the reduction in the rate of

interest by NCDRC to 9% p.a. from 15% p.a. was not for any justifiable reason.

Hence, setting aside the order passed by NCDRC, the High Court awarded

interest @ 15% p.a. on the entire amount paid by the petitioner from the date of

respective deposit till date of payment/refund of the amount. Therefore, this

appeal.

9. This Court while issuing notice on the present Special Leave Petition vide

order dated 19.02.2024 had passed the following orders:

“1. On instructions, it is stated by Mr. Shyam Divan, learned senior counsel for the petitioners that approximately 100 cases are coming against the petitioners, which may have adverse impact, if payments are allowed, under the impugned order.

2. It is also informed by Mr. Shyam Divan, learned senior counsel that the petitioners have already deposited the entire amount along with the interest at the rate of 15% per annum including Rs. 10 Lakhs.

3. Considering the aforesaid, issue notice, returnable in six weeks.

4 4. Further, we direct that in execution or otherwise, the respondent would be entitled to receive the amount under the order impugned along with the interest at the rate of 9% per annum and the remaining amount of interest and Rs.10 Lakhs, shall be detained in the account. The remaining amount shall be kept in short term auto renewal fixed deposit.”

10. On service of notice, the petitioner appeared in-person and filed the

counter affidavit reiterating the contentions raised before the SCDRC and High

Court.

11. We have heard the arguments of Mr. Tushar Mehta, learned Solicitor

General appearing for the respondents and Shri Manohar Burde, appearing in

person and perused the material placed on record.

12. Mr. Tushar Mehta appearing for the respondents strenuously argued that

the High Court was not justified in exercising its supervisory jurisdiction under

Article 227 of the Constitution of India to modify the well-reasoned findings of

NCDRC which had balanced the scale by evaluating the evidence of the parties

including pleadings and thus allowing the Writ Petition by granting enhanced

interest @ 15% p.a. is not only exorbitant, but also contrary to the principles of

law enunciated by this Court. He also urged that when petitioner had opted for

refund of amount, at the most the interest at a reasonable rate could have been

awarded as was done by the NCDRC. Awarding an interest @ 15% p.a. on

payment made by the complainant coupled with additional compensation of Rs.

10,00,000/- is unjustifiable. Hence, he prayed that appeal be allowed and

impugned order be set-aside.

5

13. The petitioner appearing as party in person argued in support of the

impugned order and contended that there have been repeated defaults on the part

of the statutory authorities and explicit deficiency of service on part of the

developer, hence interest @ 15% p.a. on account of inordinate delay is just and

appropriate warranting no interference under Article 136 of the Constitution of

India. Hence, he prayed for dismissal of the appeal.

14. Having heard the learned advocates appearing for the parties and on perusal

of the case papers, we are of the considered view that the NCDRC having taken

note of the relevant aspects including the factum of delay and the fact that

petitioner had opted for refund of money deposited, rightly held that as a home

buyer, petitioner cannot be compelled to take possession of the flat after such long

time, and as such ordered for refund of entire amount deposited with interest of

9% p.a. Placing reliance on the law laid down by this Court in ‘Bangalore

Development Authority v. Syndicate Bank, (2007) 6 SCC 711’, wherein a co-

ordinate Bench of this Court dealing with the question of grant of relief to a

consumer in cases of delay of delivery of possession held that when possession

of the allotted plot/flat/house is not delivered within the specified time, the

allottee is entitled to a refund of the amount paid with reasonable interest thereon

from the date of payment till the date of refund. The Court summarized the

general principles and in particular para 10(f) observed as follows –

“(f) Where the plot/flat/house has been allotted at a tentative or provisional price, subject to final determination

6 of price on completion of the project (that is acquisition proceedings and development activities), the development authority will be entitled to revise or increase the price. But where the allotment is at a fixed price, and a higher price or extra payments are illegally or unjustifiably demanded and collected, the allottee will be entitled to refund of such excess with such interest, as may be determined with reference to the facts of the case.”

In the present case, the High Court by the impugned order modified the

finding of NCDRC and awarded interest @ 15% p.a. primarily relying upon the

judgment of this Court in ‘Rohit Chaudhary and another v. Vipul Ltd., (2024) 1

SCC 8’, wherein this Court in order to balance the equities and to compensate the

loss caused to the purchaser/complainant who had booked an office premise for

his use, directed the refund of the amount paid along with interest @ 12% p.a.

from the date of complaint till the date of payment. However, the issue in the

instant case relates to allotment of a 3 BHK flat after payment of sale

consideration and delay in delivery of same. As such, the NCDRC considering

the entirety of the facts and circumstances of the case, had awarded interest @

9% p.a., which in our view was fair and reasonable. The interest @ 15% p.a.

awarded by High Court is excessive. Therefore, the impugned order hereby is set-

aside and the order dated 27.07.2022 passed by NCDRC in so far as it relates to

award of interest @ 9% on the respective deposit till the date of actual payment

is restored.

7

15. As already discussed above, this Court at the time of issuing notice on this

appeal, noted that the appellants have already deposited the entire amount with

interest @ 15% p.a. including Rs.10,00,000/- as ordered by SCDRC. Having

regard to the fact that the appellant herein is an instrumentality of State, the delay

if any, cannot be attributed to any personal animosity of the officers manning the

institution and they have been discharging the statutory duties. Considering the

aforesaid and in the peculiar facts and circumstances of the case, we deem it

proper to reduce the compensation payable from Rs. 10,00,000/- to Rs.7,50,000/-

as it would meet the ends of justice. Accordingly, the order stands modified to the

extent above referred to. The appeal stands partly allowed with no order as to

costs. Pending application(s), if any, shall stand consigned to records.

……………………………., J.

[J.K. MAHESHWARI]

.……………………………., J.

[ARAVIND KUMAR] New Delhi;

March 26, 2025.

8