Holding

The Court held that the Consumer Forums cannot award a uniform 18% interest rate in all cases; compensation must be determined case‑by‑case, with interest linked to loss or current rates, and the Act does cover statutory/public authorities for misfeasance in public office.

Summary

The Supreme Court examined a batch of appeals arising from orders of the National Consumer Disputes Redressal Commission (NCDRC) that uniformly awarded interest at 18% per annum in cases of deficiency of service by development authorities. The Court held that the Consumer Protection Act, 1986 has a wide reach and covers statutory and public authorities, allowing compensation for misfeasance in public office, including mental agony. However, it ruled that interest cannot be fixed at a flat rate in all cases; compensation must be assessed on the facts, with interest linked to loss or to current rates where appropriate. The Court clarified that interest under the Interest Act applies to debt or damages, not to compensation awarded as a head of damages. It directed the NCDRC to award compensation under separate heads, varying interest as per each case, and upheld the principle that authorities may be liable for compensation for oppressive or arbitrary acts.

Issues considered

Whether the Consumer Forums may award interest at a uniform rate of 18% per annum in all cases of deficiency of service by development authorities.
Whether the Consumer Protection Act, 1986 extends to statutory and public authorities and permits compensation for misfeasance in public office, including mental agony.
Whether interest under the Interest Act, 1978 is applicable to compensation awards under the Consumer Protection Act.
How the rate of interest should be determined when awarded as part of compensation.

Legislation cited

Subjects

Consumer Protection Actmisfeasance in public officecompensationinterest ratedevelopment authoritystatutory authoritydeficiency of servicemental agonypublic authority liabilityInterest Actconsumer forums jurisdiction

Judgment

A GHAZIABAD DEVELOPMENT AUTHORITY
v.
BALBIR SINGH

MARCH 17, 2004

B [S.N. VARIAVA AND H.K. SEMA, JJ.]

Consumer Protection Act, 1986:

C Consumer Forums-Jurisdiction-In cases of service rendered by
statutory and public authorities-Held, Act has a wide reach and the National
Consumer Disputes Redressa/ Commission has jurisdiction even in cases of
service rendered by statutory and public authorities-Such authorities become
liable to compensate for misfeasance in public office, i.e. an act which is
oppressive or capricious or arbitrary or negligent provided loss or irijury is
D suffered by a citizen.

Lucknow Development Authority v. MK. Gupta, [1994) I SCC 243,
relied on.

E Statutory/public authorities--Deficiency in service and/or misfeasance
in public office-Compensation for loss/injury/harassment/mental agony-
Accountability of erring officer-Held, the word 'compensation' is of a very
wide connotation-It may canst itute actual loss or expected loss and may
extend to compensation for physical, mental or even emotional suffering, insult
p or injury or loss-Commission or the Forum is entitled to award not only
value of goods or service but also to compensate a consumer for injustice
suffered by him-Commission/Forum must determine that such sufferance is
due to ma/a fide or capricious or oppressive act-Where there has been
capricious or arbitrary or negligent exercise or non-exercise of power by an
G officer of the authority, the Commission/Forum has a statutory obligation to
award compensation-If the Commission/Forum is satisfied that a complainant
is entitled to compensation for loss or injury or for harassment or mental
agony or oppression, then after recording a finding it must direct the authority
to pay compensation and then also direct recovery from those found responsible
H for such unpardonable behaviour-Where there is a specific finding of
68
G.D.A. v. BALBIR SINGH 69
misfeasance in public office compensation for mental agony can be granted- A
The compensation 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 Commission must
determine that there has been deficiency in service and/or misfeasance in
public office which has resulted in loss or injury--Alongwith recompensating
the loss the Commission!Forum may also compensate fo• harassment/injury B
both mental and physical-Administrative law-Public authorities-
Negligence-Accountability.

Lucknow Development Authority v. M.K. Gupta, [1994] 1 SCC 243,
relied on.
c
Ghaziabad Development Authority v. Union ofIndia, [2000) 6 SCC 113,
referred to.

Development authorities-Deficiency in service-Interest granted by
Consumer Forums-Nature of-National Consumer Disputes Redressal D
Commission granting 18% interest holding that this would take into
consideration the escalation in cost of construction as well-Contention that
interest is to be awarded keeping in view the rates of interest payable by
financial institutions on deposits with them-Held, in all these cases interest
is awarded as and by way of compensation/damages-Whilst so awarding it E
must be shown that there is relationship between the amount awarded and the
default/unjustifiable delay/harassment-It is thus necessary that there be
separate awards under each such head .with reasons why such award is
justified-The principle that interest must be granted at the current rate of
interest is only applicable where the proceedings are for recovery of debt or F
damages-They apply where a refund of .amount is being claimed and the
direction is to refund amount with interest-The principles which govern grant
of interest do not apply to grant of compensation.

Central Bank of India v. Ravindra, (2002) 1 SCC 367; In Defence of
Amit Das v. State of Bihar, [2001] 2 SCC 9 and United India Insurance Co. G
Ltd. v. Patricia Jean Mahajan, [2002) 6 SCC 281, cited.

Development authority-Allotment offlats/plots-Deficiency in service-
Cases before National Consumer Disputes Redressal Commission involving
varying and differentfacts--Commission awarding 18% interest uniformly in H
70 SUPREME COURT REPORTS (2004] 3 S.C.R.

A all cases-Held, Commission has been awarding interest at a flat rate of 18% /
irrespective of the facts of each case-This is unsustainable-Compensation
cannot be uniform-Award of compensation must be under different separate
heads and must vary from case to case depending on the facts of each case-
Guide/ines given how compensation would be awarded in different types of
B cases-In all fi1ture matters, Commission/Forum must award compensation
under various heads if it concludes that there has been deficiency of service
or misfeasance in public office.

Haryana Urban Development Authority v. Rajnish Chander Sharde JT,
C (2000) 8 SC 154; Bihar State Housing Board v. Prio Ranjan Roy, [1997] 6
SCC 487 and Prashant Kumar Shahi v. Ghaziabad Development Authority,
(2000) 4 sec 120, referred to.

Words and Phrases : 'Compensation' - Connotation of

0 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7173 of
2002.

From the Judgmen.t and Order dated 28.10.2002. in Petition for Special
Leave to Appeal (C) No. 21061/2001 from the Order dated 31.8.2001 of the
National Consumer Disputes Redressal Commission, New Delhi in R.P. No.
E 703 of 2001.

WITH

Civil Appeal Nos. 7391, 7793, 8400, 7700, 7288, 7792, 7788, 7396,
F 7685, 8408, 8415, 7786, 7790, 7672, 7289, 7723, 8418, 7690, 8407, 7782,
7725, 7695, 8404, 7662, 7676, 7693, 7724, 7286, 7670, 7688, 8405, 7787,
7789, 8530, 8527, 8588, 7776, 7667, 7783, 7224, 7699, 7698, 7120/2002,
C.A. Nos. 390/2003, 394, 397, 399, 400, 413, 414, 415, 416, 417, 1057,
1012, 1018, 1022 1488, 1489, 1492, 1493, 1494, 1495, 1499, 3256, 3910,
SLP(C) Nos. 8758, 8760, 8764, C.A. Nos. 3955/2003, 4068, SLP(C) Nos.
G 6079, 6081, 6083, 6084, 6085, 9600, 9663 9666, 9669, 9060, 9061, 9062,
3657, 8417, 2692, 4082, 11676, 12592, 5473, 1010, 6082, 12594, 1013,
1019, 1960 1964, 3382, 20283, 20285, 6299, 6302 6303, 6304, 6305 6306,
6307, 9715 20289, 8504, 22189, 549, 23127, 8402, 392, 404, 405, 410,
1014, 1491, 1498, 3381, 8514.
H
G.D.A. v. BALBIR SINGH 71

C.A. Nos. 1009/2003, 7878, 7775, 7781 12584, 12596, 12601 12604,
0
A
14905, 12593 8529, 7389, 393, 409, 9747, 7780 8403, 7777, 14052, 14053,
7395, 7388, 407, 8765, 8766, 8763, 9190, 9670, 9665, 9662, 12583, 12587,
12588, 12589, 12591, 12599 12603, 12605, 12606 12607, SLP(C) Nos.12608-
12609, 13785 12585, 12586, 14905 15139, 17803, SLP(C) Nos. 17805-17806,
16414, 7397, 7385, 7390, 7875, 7778, 8399, 7774, 7879 8398, 7232, 7236, B
8401, 8586, 8528, 7287, 7779, 389, 391, CA. No. 395/2003 401, 403, 408,
1011, CA. No. 1016/2003, 1015, 1017, 1020, 1490, 1496, 1961, 1962, 1963,
1966-1967, 1965, 3956, 3957, 3958, 3959, 3658, C.A. Nos. 411-412, 7386,
1021, R.P. (C) No. 1649 in 18369, SLP (C) No. 4275/2004

Not ready matters - listed for directions
c
C.A. Nos. 7225, 7285, 8589, 8587, C.A. No. 398, 1500, 1501, 8755,
6078, 6080, 9059, 9063, 9064, 12582, 12590 12610, 16415, 6077, 15291,
20287, 20288, 23120, 23124, 23122, 6297, 6298, 6300, 6301, 9717/2003,
C.A. No. 1562/2004, with SLP(C) Nos. 4853-4854/2004. D
· Soli J. Sorabjee, Attorney General, K.B. Sinha, Sudhir Kulshreshta,
Manish Singhvi, Rakesh Uttamchandra Upadhyay, Santosh Kumar, A.S.
Rawat, P. Narasimhan, K.N. Nagpal, Varinder Kumar Sharma, Pramod Swarup,
Y. Prabhakara Rao, Ashok K. Srivastava, Ravindra Kumar, Neeraj Kumar E
Jain, Aditya Kumar Chaudhary, Bharat Singh, Amit Paw.an, Ugra Sankar
Prasad, Anil Nag, Krishnanand Pandeya, Shibashish Mishra, Devesh Singh,
Paraney Ranjan , Praneet Ranjan, S.C. Paul, Manoj Kulshreshtha, Ashok
Yadav, M.S. Chanchal Goyal, C.I. Bashal, Mrs. Rekha Pandey, Himanshu
Shekhar, Prasenjit Keswani, Prashant Chaudhary, S.P. Sharma, Abhishek p
Atrey, Shishir Singh, Ashwani Bhardwaj, Satinder S. Gulati, Dr. Kailash
.. Chandra, Satish Aggarawal, Rajesh K. Sharma, Ms. Shalu Sharma, Irshad
Ahmad, Avatar Singh Rawat, Ms. Hemantika Wahi, L~shmi Raman Sin~h,
S.L. Aneja, Mohd Tahir Siddiqui, Devendra Singh, B.C. Pandey, Rakesh K.
Sharma, M.C. Dhingra, P.N. Puri, V. Sudeer, M.B. Rama Subba Raju, Balaji G
Srinivasan, Ms. S. Sunita, S. Srinivasan, Debasis Misra, P.D. Sharma, Anil
Mittal, P.K. Aggarwal, Ranjan Mukherjee, Uma Datta, Rakesh K. Khanna,
Mrs. Rashmi Khanna, Shashank Shekher, Surya Kant, Syed Ali Ahmed, Syed
Tanweer Ahmed, R.D. Upadhyay, Anil Kumar Jha, Suresh C.Gupta,
A.Guneshwar Sharma, J.K. Pali, Kamal Mohan Gupta, Chandra Prakash H
Pandey, Rameshwar Prasad Goyal, B.R. Sharma, Rajeev K. Singh, P.N.
72 SUPREME COURT REPORTS [2004) 3 S.C.R.

'I A Ramalingam, S.K. Nandy, Alok Gupta, Ms.Indra Sawhney, Ms. Arnita Gupta, y
Pramjeet Singh Lamba, Ms. Neelan Tiwari, Ms. Manjula Gupta, M.P.
Shorawala, K.L. Janjani, Pankaj Kumar Singh, Dr. Vinod Tiwari, Rakesh K.
Khanna, Piadeep Misra, Sandeep Kumar, Dr. LB. Gaur, Jitendra Mohan
Sharma, K.S.Rana, A.K. Sen Gupta, M. Jayasree, Rajiv Mehta, K.C. Kaushik,
B uulshan Bajawa, (NP), Mrs. V.D. Khanna, Dr. Meera Aggrawal, Ramesh
Chandra Mishra, Ashutosh Verma, Amit Singh, Amit Kumar, Kuldip Singh,
Prabhijit Jauhar, S.S. Jauhar, Ms. S. Narang, Raj Kumar Mehta, Prashant
Ku!11ar, Himinder Lal, S.B. Sinha, Ramesh Babu M.R., Raj Kurnar Gupta,
Sheo Kumar Gupta, Mrs. Anuju, A.N. Baradaiyar, Ravi Prakash Mehrotra,
C Mrs. Deepti R. Mehrotra, Garvesh Kabra, Mahesh Srivastava for M/s. l.M.
Nanavati Associates, Vimal Chandra S. Dave, Brij Bhushan, Ranjit Khatri,
Abhijat P.Medh, L.C. Goyal, A.S. Rawat and Javed Mahmud Rao for the
appearing parties.

Respondent-in-person in C.A. Nos. 8400/02, 8418/02, 8407 /02, C.A.
D No. 7224/02, 6079/03, 6084/03, 9600/03, 9663/03, 9062/03, 6306/03, 393/
03, and in C.A. No. 409/03.

The following Order of the Court was delivered :

E In 'this batch of matters the question is whether grant of interest at the
rate of 18% per annum by the Consumer Forums in all cases is justifiable.
As facts are varying, at this stage, this Court is only dealing with the question
of law. Thereafter this Court shall take up each case separately.

The National Consumer Disputes Redressal Commission considered a
F
bunch of matters, the lead matter being the case of Haryana Urban
Development Authority v. Darsh Kumar. The Commission held, in those
cases, that in cases of deficiency of service by development authorities like
HUDA and GDA, interest must be awarded at the rate of 18% per annum and
that this would take into consideration the escalation in the cost of construction
G as well. Pursuant to this Judgment the National Commission has been disposing
of all subsequent matters with a one paragraph order which, for all practical
purposes, reads as under :-

"We have already taken a view in the case of Haryana Urban
H Development Authority v. Darsh Kumar, [Revision Petition No.
G.D.A. v. BALBlR SINGH 73
1197 of 1998], where we have upheld the award of interest at the A
rate of 18% per annum. We have provided for certain period
during which the interest would not run. The impugned judgment
is modified only to that extent. This Revision Petition is disposed
of in terms of our judgment in the case of HUDA v. Darsh
Kumar". B
It has been shown to us that the facts are varying and different. Whilst
facts of all cases cannot be set out by way of illustration it must be stated that
_,,._ in some cases even though monies had been paid and allotments had been
made of flats/plots, the scheme itself got cancelled for some reason or the
other. Possession was thus refused to be delivered of the flats/plots allotted c
to the allottees. In some cases, at a much later date, possession of some other
flat/plot was offered at an increased rate. In some cases possession was
offered but not taken by the party. In some cases even though the scheme
was not cancelled and there was no refusal to deliver possession, yet possession
was not delivered for a number of years even after monies had been received. D
In some cases the construction was of sub-standard quality or it was
incomplete. In some of the cases the authority has demanded extra amounts
from the party. In· some cases the party had not paid the extra amounts whilst
in some cases they had paid those amounts. The question, therefore, was of
refund of those amounts wrongly collected. In some cases allotments were E
made and possession offered of flats/land which was encumbered or occupied
by some other party. In some cases the party had asked for refund of amounts
paid.

Irrespective of the type of case, irrespective of the amount of delay, the F
National Commission has been granting/confirming interest at the rate of
18% per annum without even going into the facts of the case. It must be
mentioned that in some of the matters before us it has been pointed out that
·the District and the State Forums had granted interest at a lower rate. Appeals
had been filed only by the authority. Yet the National Commission has, in the G
Appeal filed by the authority, increased the rate of interest to 18% per annum.

The learned Attorney General submitted that the liability to pay interest
only arises if there is any default or omission on the part of the Body which
caused damage or prejudice to the allottee of the flat/plot. This submission
requires to be accepted. However, in the context of the Consumer Protection H
74 SUPREME COURT REPORTS [2004] 3 S.C.R.

A Act the principles laid down in the case of Lucknow Development Authority
v. M K. Gupta, reported in [l 994] l SCC 243 have to be kept in mind. In
this case the question was whether a Development Authority rendered service
to bring it within the purview of the Consumer Protection Act. It has been
held that the Development Authority is rendering service. It has been also
B held as follows:-
"8. Having examined the wide reach of the Act and jurisdiction of the
Commission to entertain a complaint not only against business or
trading activity but even against service rendered by statutory and
public authorities the stage is now set for determining if the
c Commission in exercise of its jurisdiction under the Act could award
compensation and if such compensation could be for harassment and
agony to a consumer. Both these aspects specially the latter are of
vital significance in the present day context. Still more important
issue is the liability of payment. That is, should the society or the tax
D payer be burdened for oppressive and capricious act of the public
officers or it be paid by those responsible for it. The administrative
law of accountability of public authorities for their arbitrary and even
ultra vires actions has taken many strides. It is now accepted both by
this Court and English Courts that the State is liable to compensate
E for loss or injury suffered by a citizen due to arbitrary actions of its
employees. In State of Gujarat v. Memon Mahomed Haji Hasam,
AIR (1967) SC 1885 - [l 967] 3 SCR 938 the order of the High Court
directing payment of compensation for disposal of seized vehicles
without waiting for the outcome of decision in appeal was upheld
F both on principle of bailee's 'legal obligation to preserve the property
intact and also the obligation to take reasonable care of it .... to return
it in the same condition in which it was seized' and also because the +
Government was, 'bound to return the said property by reason of its
statutory obligation or to pay its value if it had disabled itself from
G returning it either by its own act or by act of its agents and servants'.
It was extended further even to bona fide action of the authorities if
it was contrary to law in Lala Bishambar Nath v. Agra Nagar
Mahapalika, Agra, [1973] l SCC 788 - AIR (1973) SC 1289. It was
held that where the authorities could not have taken any action against
H the dealer and their order was invalid, 'it is immaterial that the
G.D.A. v. BALBIR SINGH 75
respondents had acted bona fide and in the interest of preservation of A
public health. Their motive may be good but their orders are illegal.
They would accordingly be liable for any loss caused to the appellants
by their action.' The theoretical concept that King can do no wrong
has been abandoned in England itself and the State is now held
responsible for tortuous act of its servants. The First Law Commission B
constituted after coming into force of rhe Constitution on liability of
the State in tort, observed that the old distinction between sovereign
and non-sovereign functions should no longer be invoked to determine
liability of the State. Friedmann observed:

"It is now increasingly necessary to abandon the lingering fiction C
of a legally indivisible State, and of a feudal conception of the
Crown, and to substitute for it the principle of legal liability
where the State, either directly or through incorporated public
authorities, engages in activities of a commercial, industrial or
managerial character. The proper test is not an impracticable D
distinction between governmental and non-governmental function,
but the nature and form of the. activity in question."

Even Kasturi Lal Ralia Ram Jain v. State of UP. AIR (1965) SC
I 039 - [1965] 1 SCR 375:, (1966) 2 LLJ 583, did not provide any E
immunity for tortuous acts of public servants committed in discharge
of statutory function if it was not referable to sovereign power. Since
house construction or for that matter any service hired by a consumer
or facility availed by him is not a sovereign function of the State the
ratio of Kasturi Lal could not stand in way of the Commission F
awarding compensation. We respectfully agree with Mathew, J. in
Shyam Sunder v. State of Rajasthan, [1974] I SCC 690 that it is not
necessary, 'to consider whether there is any rational dividing line
between the so-called sovereign and proprietary or commercial
functions for determining the liability of the State' (SCC p. 695, para
20). In any case the law has always maintained that the public G
authorities who are entrusted with statutory function cannot act
negligently. As far back as 1878 the law was succinctly explained in
Geddis v. Proprietors of Bann Reservoir, [1878] 3 AC 430 thus:

"I take it, without citing cases, that it is now thoroughly well H
76 SUPREME COURT REPORTS (2004] 3 S.C.R.

A estabtished that no action will lie for doing that which the
y
Legislature has authorised, if it be done without negligence,
although it does occasion damage to anyone; but an action does
lie for doing what the Legislature has authorised, if it be done
negligently."
II
B Under our Constitutiop sovereignty vests in the people. Every limb of '
the constitutional machinery is obliged to be people oriented. No
func-tionary in exercise of statutory power can claim immunity, except
to the extent protected by the statute itself. Public authorities acting
in violation of constitutional or statutory provisions oppressively are
c accountable for their behaviour before authorities created under the
statute like the commission or the courts entrusted with responsibility
of maintaining the rule oflaw. Each hierarchy in the Act is empowered
to entertain a complaint by the consumer for value of the goods or
services and compensation. The word 'compensation' is again of very
D wide connotation. It has not been defined in the Act. According to
dictionary it means, 'compensating or being compensated; thing given
as recompense;'. In legal sense it may constitute actual loss or expected
loss and may extend to physical mental or even emotional suffering,
insult or injury or loss. Therefore, when the Commission has been
E vested with the jurisdiction to award value of goods or services and
compensation it has to be construed widely enabling the Commission
to determine compensation for any loss or damage suffered by a
consumer which in law is otherwise included in wide meaning of
compensation. The provision in our opinion enables a consumer to
p claim and empowers the Commission to redress any injustice done to
him. Any other construction would defeat the very purpose of the
Act. The Commission or the Forum in the Act is thus entitled to
award not only value of the goods or services but also to compensate
a consumer for injustice suffered by him."

G This Court then went on to hold as follows:

"10. Who should pay the amount determined by the Commi.sSio!Her
harassment and agony, the statutory authority or should it be realised
from those who were responsible for it? Compensation as explained
H includes both the just equivalent for loss of goods or services and
G.D.A. v. BALBIR SINGH 77

also for sufferance of injustice. For instance in Civil Appeal No .... A
of 1993 arising out of SLP (Civil) No. 659 of 1991 the Commission
directed the Bangalore Development Authority to pay Rs.2446 to the
consumer for the expenses incurred by him in getting the lease-cum-
sale agreement registered as it was additional expenditure for
alternative site allotted to him. No misfeasance was found. The moment B
the authority came to know of the mistake committed by it, it took
immediate action by allotting alternative site to the respondent. It was
compensation for exact loss suffered by the respondent. It arose in
j-
due discharge of duties. For such acts or omissions the loss suffered
has to be made good by the authority itself. But when the sufferance c
is due to ma/a fide or oppressive or capricious acts etc. of a public
servant, then the nature of liability changes. The Commission under
the Act could determine such amount if in its opinion the consumer
suffered injury due to what is called misfeasance of the officers by
the English Courts. Even in England where award of exemplary or D
aggravated damages for insult etc. to a person has now been held to
be punitive, exception has been carved out if the injury is due to,
..; 'oppressive, arbitrary or unconstitutional action by servants of the
Government' (Salmond and Heuston on the Law of Torts). Misfeasance
in public office is explained by Wade in his book on Administrative E
Law thus:

"Even where. there is no ministerial duty as above, and even
~
where no recognised tort such as trespass, nuisance, or negligence
is committed, public authorities or officers may be liable in
damages for malicious, deliberate or injurious wrong-doing. There F
is thus a tort which has been called misfeasance in public office,
and which includes malicious abuse of power, deliberate
maladministration, and perhaps also other unlawful acts causing
injury." (p.777).
G
The jurisdiction and power of the courts to indemnify a citizen for
injury suffered due to abuse of power by public authorities is founded
as observed by Lord Hai/sham in Cassell & Co. Ltd. v. Broome,
~ (1972] AC 1027 - (1972] I All ER 801 on the principle that, 'an
award of exemplary damages can serve a useful purpose in vindicating H
78 SUPREME COURT REPORTS [2004] 3 S.C.R.

A the strength of law'. An ordinary citizen or a common man is hardly
equipped to match the might of the State or its instrumentalities. That
is provided by the rule of law. It acts as a check on arbitrary and
capricious exercise of power. In Rookes v. Barnard, (1964] AC 1129
- (1964] 1 All ER 367, 4 IO it was observed by Lord Devlin, 'the
B servants of the government are also the servants of the people and the
use of their power must always be subordinate to their duty of service'.
A public functionary if he acts maliciously or oppressively and the
exercise of powers results in harassment and agony then it is not an
exercise of power but its abuse. No law provides protection against
C it. He who is responsible for it must suffer it. Compensation or damage
as explained earlier may arise even when the officer discharges his
duty honestly and bona fide. But when it arises due to arbitrary or
capricious behaviour then it loses its individual character and assumes
social significance. Harassment of a common man by public authorities
D is socially abhorring and legally impermissible. It may harm him
personally but the injury to society is far more grievous. Crime and
corruption thrive and prosper in the society due to lack of public
resistance. Nothing is more damaging than the feeling of helplessness.
An ordinary citizen instead of complaining and fighting succumbs to
E the pressure of undesirable functioning in offices instead of standing
against it. Therefore the award of compensation for harassment by
public authorities not only compensates the individual, satisfies him
personally but helps in curing social evil. It may result in improving
the work cult4re and help in changing the outlook. Wade in his book
F Administrative Law has observed that it is to the credit of public
authorities that there are simply few reported English decisions on
this form of malpractice, namely, misfeasance in public offices which
includes malicious use of power, deliberate maladministration and
perhaps also other unlawful acts causing injury. One of the reasons
for this appears to be development of law which apart, from other
G
factors succeeded in keeping a salutary check on the functioning in
the government or semi-government offices by holding the officers
personally responsible for their capricious or even ultra vires action
resulting in injury or loss to a citizen by awarding damages against
them. Various decisions rendered from time to time have been referred
H
;-
\

G.D.A. v. BALBIR SINGH 79
to by Wade on Misfeasance by Public Authorities. We shall refer to A
some of them to demonstrate how necessary it is for our society. In
Ashby v. White, (1703) 2 Ld. Raym 938 the House of Lords invoked
the principle of ubijus ibi remedium in favour of an elector wh.o was
wrongfully prevented from voting and decreed the claim of damages.
The ratio of this decision has been applied and extended by English B
Courts in various situations. In Roncarelli v. Duplessis, (I 959) 16
DLR 2d 689 the Supreme Court of Canada awarded damages against
the Prime Minister of Quebec personally for directing the cancellation
of a restaurant-owner's liquor licence solely because the Iicens<!e
provided bail on many occasions for fellow members of the sect of c
Jehovah's Witnesses, which was then unpopular with the authorities.
It was observed that, 'what could be more malicious than to punish
this licensee for having done what he had an absolute right to do in
a matter utterly irrelevant to the Alcoholic Liquor.Act? Malice in the
~
proper sense is simply acting for a reason and purpose knowingly D
foreign to the administration, to which was added here the element of
intentional punishment by what was virtually vocation outlawry. In
Smith v. East Elloe Rural District Council, [1956] AC 736 - [1956]
I All ER 855 the House of Lords held that an action for damages
might proceed against the clerk of a local authority personally on the
E
ground that he had procured the compulsory purchase of the plaintiffs
property wrongfully and in bad faith. In Farrington v. Thompson,
[ 1959] UR 286 the Supreme Court of Victoria awarded damages for
exercising a power the authorities knew they did not possess. A
licensing inspector and a police officer ordered the plaintiff to close
F
his hotel and cease supplying liquor. He obeyed and filed a suit for
the resultant loss. The Court observed:

"Now I take it to be perfectly clear, that if a public officer
abuses his office, either by an act of omission or commission,
and the consequence of that is an injury to an individual, an G
action may be maintained against such public officer."

In Wood v. Blair, [The Times, July 3, 4, 5, 1957 (Hallet J and Court
~ of Appeal] a dairy farmer's manageress contracted typhoid fever and
the local authority served notices forbidding him to sell milk, except H

·I
80 SUPREME COURT REPORTS [2004] 3 S.C.R

A under certain conditions. These notices were void, and the farmer
was awarded damages on the ground that the notices were invalid
and that the plaintiff was entitled to damages for misfeasance. This
was done even though the finding was that the officers had acted
from the best motives.
B
11. Today the issue thus is not only of award of compensation but
·who should bear the brunt. The concept of authority and power
exercised by public functionaries has many dimensions. It has
undergone tremendous change with passage of time and change in
socio-economic outlook. The authority empowered to function under
c a statute while exercising power discharges public duty. It has to act
to subserve general welfare and common good. In discharging this
duty honestly and bona fide, loss may accrue to any person. And he
may claim compensation which may in circumstances be payable.
But where the duty is performed capriciously or the exercise of power J
D results in harassment and agony then the responsibility to pay the loss
determined should be whose? In a modern society no authority can
arrogate to itself the power to act in a manner which is arbitrary. It
is unfortunate that matters which require immediate attention linger
on and the man in the street is made to ,run from one end to other
E with no result. The culture of window clearance appears to be totally
dead. Even in ordinary matters a common man who has neither the
political backing nor the financial strength to match the inaction in
public oriented departments gets frustrated and it erodes the credibility
in the system. Public administration, no doubt involve·s a ~·ast amount
F of administrative discretion which shields the action of administrative
authority. But where it is found that exercise of discretion was ma/a
fide and the complainant is entitled to compensation for mental and
physical harassment then the officer can no more claim to be under
protective cover. When a citizen seeks to recover compensation from
G a public authority in respect of injuries suffered by him for capricious
exercise of power and the National Commission finds it duly proved
then it has a statutory obligation to award the same. It was never
more necessary than today when even social obligations are regulated
by grant of statutory powers. The test of permissive form of grant is
H over. It is now imperative (Ind implicit in the exercise of power that
G.D.A. v. BALBIR SINGH 81
it should be for the sake of society. When the Court directs payment A
of damages or compensation against the State the ultimate sufferer is
the common man. It is the tax payers' money which is paid for
inaction of those who are entrusted under the Act to discharge their
duties in accordance with law. It is, therefore, necessary that the
Commission when it is satisfied that a complaijlant is entitled to B
compensation for harassment or mental agony or oppression, which
finding of course should be recorded carefully on material and
con.vincing circumstances and not lightly, then it should further direct
the department concerned to pay the amount to the complainant from
the public fund immediately but to recover the same from those who C
are found responsible for such unpardonable behaviour by dividing it
proportionately where there are more than one functionaries."

We are in full agreement with what is observed herein. Thus the law is that
the Consumer Protection Act has a wide reach and the Commission has
jurisdiction even in cases of service rendered by statutory and public D
authorities. Such authorities become liable to compensate for misfeasance in
.,1 public office i.e. an act which is oppressive or capricious or arbitrary or
negligent provided loss or injury is suffered by a citizen. The word
compensation is of a very wide connotation. It may constitute actual loss or
expected loss and may extend to compensation for physical, mental or even E
emotional suffering, insult or injury or loss. The provisions of the Consumer
Protection Act enables a consumer to claim and empower the Commission to
redress any injustice done. The Commission.or the Forum is entitled to.award
not only value of goods or services but also to ~ompensate a co·nsumer for
injustice suffered by him. The Commission/Forum must determine that such F
sufferance is due to malafide or capricious or oppressive act. It can then
determine amount for which the authority is liable to compensate the consumer
for his sufferance due to misfeasance in public office by the officers. Such
compensation is for vindicating the strength of law. It acts as a check on
arbitrary and capricious exercise of power. It helps in curing social evil. It G
will hopefully result in improving the work culture and in changing the
outlook of the officer/public servant. No authority can arrogate to itself the
power to act in a manner which is arbitrary. Matters which require immediate
attention should not be allowed to linger on. The consumer must not be made
to run from pillar to post. Where there has been capricious or arbitrary or H
82 SUPREME COURT REPORTS [2004] 3 S.C.R.

A neg Iigent exercise or non exercise of power by an officer of the authority, the
Commission/Forum has a statutory obligation to award compensation. If the
Commission/Forum is satisfied that a complainant is entitled to compensation
for loss or injury or for harassment or mental agony or oppression, then after
recording a finding it must direct the authority to pay compensation and then
B also direct recovery from those found responsible for such unpardonable
behaviour.

At this stage itself it must be ·mentioned that learned Attorney General
had relied upon the case of Ghaziabad Development Authority v. Union of
C India reported in (2000] 6 SCC 113 wherein, whilst considering a case of
breach of contract under Section 73 of the Contract Act, it has been held that
no damages are payable for mental agony in cases of breach of ordinary
commercial contracts. This Court considered the case of Lucknow Development
Authority (supra) and held that liability for mental agony had been fixed not
within the realms of contract but under principles of administrative law. In
D this case the award towards mental agony was deleted on the ground that
these were no pleadings to that effect and no finding on that point This
authority does not take a contrary view to the principles laid down in Lucknow ;.,
Development Authority's case but merely differentiates it on facts. Thus where
there is a specific finding of misfeasance in public office compensation for
E mental agony can be granted. If there are findings of misfeasance in public
office then the principles set out in this authority will have no application and
the principles set out in Lucknow Development Authority's case (supra) would
apply. In such cases it would be open for the Commission/Forums to grant
compensation for mental agony.
F
However, the power to 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
G 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
H
\
r G.D.A. v. BALBIR SINGH 83
the brochure. The Commission/Forum would then need to determine the loss. A
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, B
compensation can be given if after allotment is made and there has been
cancellation of scheme without any justifiable cause.

That compensation cannot be uniform and can best of illustrated by
considering cases where possession is being directed to be delivered and C
cases where only monies are directed to be returned. In cases where possession
is being directed to be delivered the compensation for harassment will
necessarily have to be less because in a way that party is being compensated
by increase in the value of the property he is getting. But in cases where
monies are being simply returned then the party is suffering a loss inasmuch
as he had deposited the money in the hope of getting a flat/plot. He is being D
deprived of that flat/plot. He has been deprived of the benefit of escalation
of the price of that flat/plot. Therefore the compensation in such cases would
necessarily have to be higher. Further if the construction is not of good
quality or not complete, the compensation would be the cost of putting it in
good shape or completing it along with some compensation for harassment. E
Similarly, if at the time of giving possession a higher price or other amounts
is collected unjustifiably and without there being any provision for the same
the direction would be to refund it with a reasonable rate of interest. If
possession is refused or not given because the consumer has refused to pay
the amount, then on the finding that the demand was unjustified the consumer F
can be compensated for harassment and a direction to deliver possession can
be given. If a party who has paid the amount is told by the authority that they
are not in a position to ascertain whether he has paid the amount and that
party is made to run from pillar to post in order to show that he has paid the
amount, there would be deficiency of service for which compensation for G
harassment must be awarded depending on the extent of harassment. Similarly,
if after delivery of possession, the sale deeds or title deeds are not executed
without any justifiable reasons, the compensation would depend on the amount
of harassment suffered. We clarify that the above are mere examples. They
are not exhaustive. The above shows that compensation cannot be the same H
I
'
84 SUPREME COURT REPORTS [2004] 3 S.CR.

A in all cases irrespective of the type of loss or injury suffered by the consumer.

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.
Th is, in our view, is unsustainable. Award of compensation must be under
B different separate heads and must vary from case to case depending on the
facts of each case.

At this stage, it must be mentioned that the National Forum has, in its
Judgment in Darsh Kumar's case (supra) stated that the interest at the rate of
18% per annum takes into consideration the escalation in the cost of
c construction as well. Even if that be so the compensation cannot be at a
uniform rate. If the delay is only of one or two years the escalation in the cost
of construction will not be as much as in a case where the delay is of five
years or more. Therefore, if compensation has to be awarded for escalation
in the costs of construction, it must be done under that head after taking into
D consideration the amount of delay. Such compensation can be fixed on the
basis of indexes of bodies like CPWD or PWD. Further, it must be noted that
where a flat is allotted and possession given even though it is given belatedly
there will be no question of escalation in the cost of construction. Yet, even
in such cases interest at the rate 18% per annum including escalation in the
E cost of construction has been granted. Further in cases where the Commission/
Forum has directed delivery of possession the party has to a certain extent
has already got a benefit. The cost of the land/flat would have gone up in the
meantime. Of course, even in cases where delivery of possession has been
directed there could be compensation for the harassment/loss. But such
F compensation has to be worked out after looking into the facts of each case
and after determining what is the amount of harassment/loss which had been
caused to the consumer.

The National Forum in the lead judgment has considered the authorities
G of this Court in the case of Ghaziabad Development Authority v. Dhanesh
Chand Goel, [SLP (Civil) No. 11315/2000) decided on 12th January, 2001
arising from the order of the MRTP Commission dated 22nd Fabruary, 2000]
and the case of Haryana Urban Development Authority v. Rajnish Chander ·
Sharde, reported in JT (2000) 8 SC 154. From these decisions, the National
H Forum has concluded that award of interest at the rate of 18% per annum on
)'
.. G.D.A. v. BAL BIR SINGH 85

...,, amount deposited by the allottee where there is a delay in handing over A
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 's case (supra) the facts were gross. Those facts have been set out in the
order of the National Forum itself. Those facts show that GOA started a
scheme for allotment of houses in Governdpuram. Dhanesh Chand had applied B
for allotment. He had paid the amount. He had been intimated on 16th
November, 1993 that he had been allotted a house, as per the draw held on
20th October, 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
c
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%
D
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 justified grant
of interest at such a rate. Similarly, in Rajnish Chander Sharde 's.case (supra),
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 E
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 this Court
uphiild the grant of interest @ 18% per annum. Far from showing that these F
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. The learned Attorney General
submitted that interest is .to be awarded taking into consideration the rates of
interest which would .be payable by Financial Institutions if amounts are G
deposited with them. He.submitted that the Interest Act, 1978 is applicable
even to a Tribunal. He pointed out that under the Interest Act the "current
.
• rate of interest" would mean the highest of the maximum rates at which
interest may be paid on different classes of deposits by different classes of
scheduled banks in accordance with the directions given or issued by the H
86 SUPREME COURT REPORTS [2004] 3 S.C.R.
..
A Reserve Bank of India under the Banking Regulations Act, 1949. He relied 7"
on Section 3 of the Interest Act which provides that in any proceedings for
the recovery of any debt or damages or in any proceedings in which a claim
for interest in respect of any debt or damages already paid is made, the Court .
may, if it thinks fit, allow interest to the person entitled io the debt or damages
B or to the person making such claim, as the case may be, at a rate not exceeding
the current rate of interest. He submitted that the Commission whilst awarding
interest has to follow the provisions of the Interest Act. He submitted that the
same principles apply under Section 34 of the Code of Civil Procedure.

c India The learned Attorney General relied upon the case of Central Bank of
v. Ravindra reported in [2002] I SCC 367, wherein interest has been
defined as follows:

"37. Black's Law Dictionary (7th Edn.) defines "interest" inter alia
as the compensation fixed by agreement or allowed by law for the
D use or detention of money, or for the loss of money by one who is
entitled to its use; especially, the amount owed to a lender in return
for the use of the borrowed money. According to Stroud's Judicial
Dictionary of Words And Phrases (5th Edn.) interest means, inter
alia, compensation paid by the borrower to the lender for deprivation
E of the use of his money. Jn Secy., Irrigation Dept!., Govt. of Orissa
V. G.C. Roy, [1992] l sec 508 the Constitution Bench opined that

a person deprived of the use of money to which he is legitimately
entitled has a right to be compensated for the deprivation, call it by
any name. n· may be ca11~d interest, comvensartou or damages .... llfiis
F is·the principles of section 34 of the Civil Procedure Code. In Sham
Lal Narula (Dr) v. CIT, AIR (1964) SC 1878 - [1964] 7 SCR 668 this
Court held that interest is paid for the deprivation of the use of the
money. The essence of interest in the opinion if Lord Wright, in
Riches v. Westminster Bank Ltd., (1947] I All ER 469: [1947] AC
390 (HL) All ER at p. 472 is that it is a payment which becomes due
G
because the creditor has not had his money at the due date. It may be
regarded either as representing the profit he might have made if he
had had the use of the money, or, conversely, the loss he suffered
because he. had not that use. The general idea is that he is entitled to
,.. .
compensation for the deprivation; the money due to the creditor was
H not paid, or, in other words, was withheld from him by the debtor
)
G.D.A. v. BALBIR SINGH 87
after the time when payment should have been made, in breach of his A
legal rights, and interest was a compensation whether the compensation
was liquidated under an agreement or statute. A Division Bench of
the High Court of Punjab speaking through Tek Chand, J. In CIT v.
Dr. Sham Lal Naru/a, AIR (1963) Punj 411 - (1963) 50 ITR 513 thus
articulated the concept of interest: (AIR p. 414, para 8) B
"8. The words 'interest' and 'compensation' are sometimes
used interchangeably and on other occasions they have
distinct connotation. 'Interest' in general terms is the return
or compensation for the use or retention by one person of a C
sum of money belonging to or owed to another. In its narrow
sense, 'interest' is understood to mean the amount which
one has contracted to pay for use of borrowed money ..... In
whatever category 'interest' in a particular case may be put,
it is a consideration paid either for the use of money or for D
forbearance in demanding it; after it has fallen due, and
thus, it is a charge for the use or forbearance of money. In
this sense, it is a compensation allowed by law or fixed by
parties, or permitted by custom or usage, for use of money,
belonging to another, or for the delay in paying money after
it has become payable." E

In this case it is also observed that the Reserve Bank of India has supervisory
role over banking. It is observed that Reserve Bank of India has been issuing
directions/circulars dealing with rates of interest. It is held that the Reserve
Bank of India circulars can be treated as standards regarding rates of interest. F
The learned Attorney General then referred to the case of In Defence
of Amit Das v. State of Bihar, reported in [2001] 2 SCC 9, wherein, in the
context of a claim under the Motor Vehicles Act, this Court has noted that
with the change in economy and policy of Reserve Bank of India the interest G
rates are lowered. Interest at the rate of 9% was granted on the footing that
nationalised banks now grant interest at that rate on fixed deposits for one
year. It was pointed out that this reasoning was approved by this Court in the
case of United India Insurance Co. Ltd. v. Patricia Jean Mahajan, reported
in [20021 6 sec 2s 1.
H
/
88 SUPREME COURT REPORTS [2004] 3 S.C.R.

A The learned Attorney General also relied on the case of Bihar State r
Housing Board v. Prio Ran.Jan Roy, reported in [1997] 6 SCC 487 wherein
it is held that where damages are awarded there must be assessment thereof.
It is held that the Order awarding damages must contain an indication of the
basis upon which the amount awarded is arrived at. It was held that in the
B Order there must be some statement about the relationship between the amount
awarded and the default and unjustifiable delay and harassment found to
have been caused. This Court then remitted the matter back to National
Commission for consideration of the aspect of compensation de-hors. It was
directed that if damages are awarded reasons must be set out.
c The learned Attorney General also relied upon the case cif Prashant
Kumar Shahi v. Ghaziabad Development Authority, reported in (2000) 4
SCC 120. In this case it has been held that facts would have to be looked into
to ascertain whether the authority or the allottee was responsible for the
D alleged delay.

There can be no dispute to the principles laid down in Prashant Kumar
Shahi 's case and Bihar State Housing Board's case (supra). It is on these
principles that it is already held that awaring interest at a flat rate of 18% is
not justified. It is clear that in all these cases interest is being awarded as and
E by way of compensation/damages. Whilst so awarding it must be shown that
there is relationship between the amount awarded and the default/unjustifiable
delay/harassment. It is thus necessary that there be separate awards under
each such head with reasons why such award is justified. However, the
principles that interest must be granted at the current rate of interest is only
F applicable where the proceeding are for recovery of debt or damages. They
apply where a refund of amount is being claimed and the direction is to
refund amounts with interest. The principles which govern grant of interest
do not apply to grant of compensation. For this reason also it becomes
necessary to consider facts and award damage/compensation under various
G heads.
That brings 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
H 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
G.D.A. v. BALBIR SINGH 89
particular period and further direct that if payment is not made with in that A
time the authority will also pay interest. Such interest must be based on the
current rate of interest.

Now we come to the question as to what is to be done in all these
matters where the Commission/Forum has already passed the stereo-type B
order set out above. To remit all matters back to the Commission would
cause undue hardship and unnecessary costs to the Consumer, many of whom
are appearing in person as they cannot afford a lawyer. In all future matters
the Commission/Forum must now award compensation under various heads
if it concludes that there has been deficiency of service or misfeasance i~ C
public office. So far as this bunch of matters is concerned instead ofremitting
them back we consider it expedient to take up each matter ourselves. If we
find that the Forum/Commission has on facts found deficiency of service or
misfeasance in public office, then depending on facts of that case we may not
interefere with the award of interest. We will.then treat it to be in lieu of D
compensation. We may however vary the rate of interest depending on facts
of each case. Just by way of example we take two instances set out below .
..;. In a Scheme known as "Karpuripuram Scheme" plots were allotted,
monies collected. However thereafter the scheme was cancelled. In some of
the matters we have seen that the District Forum has recorded that the authority E
could give no explanation as to why the Scheme was cancelled. Before us
some sort of explanation is sought to be given. In our view, irrespective of
whether there was genuine reason to cancel or not, the monies must be
returned with interest at the rate of 18%. We say so because it is clear that
even if the body has not already floated another scheme on the same land it F
is clear that the body is going to derive great profit from this land and
~ therefore compensating the allottee with interest at 18% per annum is just
and fair.

In Civil Appeal No. 7224 of 2002 the Respondent had applied for a G
house in a Scheme floated in 1992. He had paid the entire cost. He had been
allotted a flat and issued a reservation letter. Yet no possession was given.
Thereafter, in 1996 the Respondent was informed that for unavoidable reasons
..J the house has been allotted to somebody else and if he desires, he can obtain
an alternate flat at a much higher price. This therefore is also a case where
H
absolutely no justifiable reason why the party has not been delivered possession
90 SUPREME COURT REPORTS [2004] 3 S.CR.

A of the flat which had been allotted to him nor has any offer been made to
return his money with interest. Instead the body has asked the party to apply
for an alternate flat at a higher rate. In our view, on these facts the award of
interest at the rate I 8% is justified. It is not just interest on the amount
invested but is also compensation for the harassment and agony caused to the
B allottee. We have given these two instances only by way of illustrations.

As stated above the interest, in both these cases, will be payable from
the date the monies were paid till they are retained or deposited in Court/
Tribunal. We however clarify that merely because we are maintaining awards
of interest it must not be taken to mean that in future the Commission/Forum
c must not work out compensation under various heads and that they can
continue to grant interest only by way of damage/compensation.

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
D upon the party to refund the amount which have already been paid.

Another point also requires consideration at this stage. In the lead
Judgment the Nllotional Commission has held that no interest is payable for
the period 24/4/1991 to 16/12/1993 as during that period there was a stay
E order passed by the Allahabad High Court in operation. Some of the allottees
have filed Appeals challenging that portion of the Order. It is contended, on
their behalf that there was no stay order in respect of the plots allotted to
them. It was contended that the authority cannot justify non-delive1y to them.
As against this it is pointed out that this Court has already in the case of
F G.D.A. v. Sanchar Vihar Sahkari Avas Samiti Ltd., reported in [1996] 9 SCC
314 upheld the view of the National Commission in refusing interest or
damages for the period during which the stay operated. It is also pointed out
that the Commission had deputed the Vice-Chairman to enquire and report
whether the authority was prevented from delivering possession to all due to
the stay order. It is pointed out that the Vice-Chairman had submitted a
G Report pointing out that even though the stay Order was not in respect of all
plots, yet the authority could not deliver possession of any plot as well the
pipelines and other infrastructural work had to be taken through the plots in
respect of which the stay Order operated. As per the Report of the Vice
Chairman the authority was prevented, by the stay Order, from delivering
H possession to anybody. The National Commission has accepted this Report.
G.D.A. v. BALBIR SINGH 91

We see no reason to take a different view, particularly when another Bench A
has already refused to interfere on this aspect.

' - Before we part with this Order, we have to mention that many parties
complained to us that even the undisputed amounts had not been paid to
them. This was disputed on behalf of the authorities. However, it is clear that B
the amounts were paid/deposited belatedly. We therefore clarify that unless
there is a stay obtained from a higher forum, the mere fact of filing of an
Appeal/Revision will not entitle the authority to not comply with the Order
of the Forum. Even though the authority may have filed an Appeal/Revision,
if no stay is obtained or if stay is refused, the Order must be complied with. C
In such cases the higher forum should, before entertaining the Appeal/Revision,
ensure that the Order is first complied with.

The matters are adjourned for two weeks.

R.P. Matters are Pending. D

•