H.U.D.AversusPREM KUMAR AGARWAL & ANR.

                                 [2008] 1 S.C.R. 807


      t                               H.U.D.A.                               A
                                          V.
                        PREM KUMAR AGARWAL & ANR.
                            (C.A. No. 469 of 2008)
                                JANUARY 17, 2008
                                                                             B
               [DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.)
~


     +            Interest - Rate of - Allowed by National Consumer
            Commission at the rate of 18% per annum - Propriety of -
            Held: Rate of interest has to be based on current rate - Hence   c
            rate of interest directed to be at the rate of 12%.
                 National Consumer Disputes Redressal Commission
            allowed interest @ 18% per annum on the appellant-
            Authority holding that the Authority could. not charge price
            for alternative plot allotted to the respondent, over and D
    '-c~
            above the price of original plot. In the present appeal, the
            authority has challenged the award of interest as being
            on the high side.
                 Partly allowing the appeal, the Court
                                                                        E
                  HELD: Rate of interest on compensation has to be
            based on current rate. Considering the fact that this court
            by the interim order had directed stay of the amount
            payable beyond 12%, the respondent would· be entitled
            to interest at the rate of 12% instead of 18% as fixed by F
            the Commission. [Para 8) [811-H; 812-A]
                 Ghaziabad Development Authority v. Balbir Singh
            2004(5) sec 65 - relied on.
                 CIVILAPPELLATE JURISDICTION: Civil Appeal No. 469 G
     __,.   of 2008.
                 From the final Judgment and Order dated 20.10.2003 of
            the National Consumer Disputes Redressal Commission, New
            Delhi in Revision Petition No. 2892 of 2003.
                                         807                                 H
    808       SUPREME COURT REPORTS                     [2008] 1 S.C.R.


A         D.P. Singh, Sanjay Jain, Rajat Vohra and Priyanka Singh
    for the Appellant.
          The Judgment of the Court was delivered by
          DR. ARIJIT PASAYAT, J. 1. Leave granted.
B
          2. Challenge in this appeal is to the order passed by the
    National Consumer Disputes Redressal Commission, New                           y
    Delhi (in short the 'Commission'). The issue before the
                                                                              ;,
    Commissioner which was considered in the Revision Petition
    of the appellant was as follows.
c
               "When the possession of the plot originally allotted in
          a particular sector could not be given to the allottee for any
          reason for no fault of his and HUDA (Haryana Urban
          Development Authority) is required to allot an alternative
          plot in lieu thereof in any other sector, what price HUDA is
D
          to charge for the alternative plot allotted in the different
          sector."
                                                                             ,_,
       3. The Commission was considering various cases and
  the case of HUDA v. R.P Chawla (Revision Petition Nos.17-18
E of 1997) was taken as an illustrative case. Ultimately, the
  Commission came to hold as follows:
          "The issue before us is the allotment of alternative plot. It
          is also to be seen that if for no fault of the allottee, he is
          deprived. of his plot allotted to him and in lieu of that he is
F         allotted some other plot in the same or any other sector he       f...
          cannot be asked to pay the price over and above of original
          plot which he will have to pay. In this case allottee would
          be entitled to interest @ 18% per annum. The interest
          amount shall however be payable from the date of
G         respective deposits of the amounts."
          4. Rate of interest fixed by the Commission is under              +
    challenge.
       5. Learned counsel for the appellant has submitted that in
H several cases this Court has held that a fixed rate of interest of
           H.U.D.A. v. PREM KUMAR AGARWAL & ANR.                      809
                          [PASAYAT, J.]

      18% is high.                                                           A
           6. There is no appearance on behalf of respondents in
      spite of service of notice.
           7. In Ghaziabad Development Authority v. Balbir Singh
      [2004(5) SCC 65] it was inter alia observed as follows:                B
            "8. However, the power and duty to award compensation
            does not mean that irrespective of facts of the case
            compensation can be awarded in all matters at a uniform
            rate of 18% per annum. As seen above, what is being
            awarded is compensation i.e. a recompense for the loss           C
            or injury. It therefore necessarily has to be based on a
            finding of loss or injury and has to correlate with the amount
            of loss or injury. Thus the Forum or the Commission must
            determine that there has been deficiency in service and/
            or misfeasance in public office which has resulted in loss       D
            or injury. No hard-and-fast rule can be laid down, however,
            a few examples would be where an allotment is made,
            price is rl'!ceived/paid but possession is not given within
            the period set out in the brochure. The Commission/Forum
            would then need to determine the loss. Loss could be             E
          · 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              F
            compensate for harassment/injury, both mental and
            physical. Similarly, compensation can be given if after
            allotment is made there has been cancellation of scheme
            without any justifiable cause.
                    '
           )()()(                   )()()(                 )()()(
                                                                             G
·-t        10. As has been set out hereinabove, the National Forum
           has been awarding interest at a flat rate of 18% per annum
           irrespective of the facts of each case. This; in our view, is
           unsustainable. Award of compensation must be under H
    810            SUPREME COURT REPORTS                [2008) 1 S.C.R.


A         different separate heads and must vary from case to case          -t
          depending on the facts of each case.
          )()()(                  )()()(                 )()()(


          12. The National Forum in the lead judgment has
B         considered the authorities of this Court in the case of
          Ghaziabad Development Authority v. Dhanesh Chand
          Goel and the case of Haryana Urban Development
          Authority v. Rajnish Chander Sharda. From these
          decisions, the National Forum has concluded that award
c         of interest at the rate of 18% per annum on amount
          deposited by the allottee where there is a delay in handing
          over possession is reasonable and could be awarded on
          equitable grounds. In our view, this conclusion of the
          National Forum is not correct. In Dhanesh Chand Goe/.
D         case the facts were gross. Those facts have been set out
          in the order of the National Forum itself. Those facts show
          that GDA started a scheme for allotment of houses in
          Governdpuram. Dhanesh Chand had applied for allotment.
          He had paid the amount. He had been intimated on 16-
E         11-1993 that he had been allotted a house, as per the
          draw held on 20-10-1993. Thereafter in 1996 he was
          informed that there was an increase in the price. He did
          not pay the increased amount and therefore possession
          was not given to him. It appears that the flat which had
          been allotted to him was thereafter allotted to one Shanti
F
          Suraksha Bal. Shri Dhanesh Chand was asked to give
          his option for allotment in some other scheme at a different
          place. It is under those circumstances that refund was
          directed with interest at the rate of 18% per annum. This
          Court while dismissing the special leave petition was
G
          careful enough to record that the rate of 18% interest per
          annum was reasonable given the facts recorded by the
          lower authority. Thus, this case shows that if the facts are
          gross then 18% interest could be given but the Forum
          must first conclude that the facts justify grant of interest a~
H
         H.U.D.A. v. PREM KUMAR AGARWAL & ANR.                    811
                        [PASAYAT, J.]

         such a rate. Similarly, in Rajnish Chander Sharda case A
         the facts were such that they justified a grant of interest at
         the rate of 18% per annum. This Court has noted that
         there was delay in delivery of possession and in the
         meantime the complainant had been compelled to live in
         rented accommodation and pay Rs.1600 per month. This B
         Court has noted that interest at 18% was given instead of
         directing the body to compensate for the loss caused
         i.e. at the rate of Rs.1600 per month. It is on those facts
         that this Court upheld the grant of interest@ 18% per
         annum. Far from showing that these authorities justify c
         grant of interest at 18% in all cases irrespective of the
         facts, the authorities of this Court clearly indicate that
         interest at such rate is to be granted only when the
         facts so justify.
         19. That brings us to the question as to the date from D
         which interest would be payable. Normally in cases of
         refund interest will be payable from the date the monies
         were deposited with the body till they are returned either
         by payment to that party or deposited in a court. In cases
         where compensation is directed to be paid, the E
         Commission/Forum must direct payment within a
         particular period and further direct that if payment is not
         made within that time the authority will also pay interest.
         Such interest must be based on the current rate of
         interest.                                                   F
         xxx                     xxx                   xxx
         24. We clarify that in all cases where interest has already
         been paid @ 18% irrespective of the above order, the
         authority will not be entitled to call upon the party to refund G
         the amount which has already been paid."
                                        (underlined for emphasis)
          8. In para 19 quoted above it was held that such rate of
    interest has to be based on current rate. Considering the fact H
(
    812      SUPREME COURT REPORTS              [2008] 1 S.C.R.


A that by order dated 26.4.2004, we had directed stay of the      +
  amount payable beyond 12%, the respondent would be entitled
  to interest at the rate of 12% instead of 18% as fixed by the
  Commission.
         9. The appeal is allowed to the aforesaid extent. No
8
    costs.

    K.K.T.                               Appeal partly allowed.




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