Haryana Urban Development … vs Saurabh Aggarwal on 24 September, 2004

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Supreme Court of India
Haryana Urban Development … vs Saurabh Aggarwal on 24 September, 2004
Author: S N Variava
Bench: S.N. Variava, A.K. Mathur
           CASE NO.:
Appeal (civil)  5877 of 2002

Haryana Urban Development Authority

Saurabh Aggarwal

DATE OF JUDGMENT: 24/09/2004





Before this Court a large number of Appeals have been filed by
the Haryana Urban Development Authority and/or the Ghaziabad
Development Authority challenging Orders of the National Consumer
Disputes Redressal Commission, granting to Complainants, interest at
the rate of 18% per annum irrespective of the fact of each case. This
Court has, in the case of Ghaziabad Development Authority vs. Balbir
reported in (2004) 5 SCC 65, deprecated this practice. This
Court has held that interest at the rate of 18% cannot be granted in all
cases irrespective of the facts of the case. This Court has held that the
Consumer Forums could grant damages/compensation for mental
agony/harassment where it finds misfeasance in public office. This
Court has held that such compensation is a recompense for the loss or
injury and it necessarily has to be based on a finding of loss or injury
and must co-relate with the amount of loss or injury. This Court has
held that the Forum or the Commission thus had to determine that
there was deficiency in service and/or misfeasance in public office and
that it has resulted in loss or injury. This Court has also laid down
certain other guidelines which the Forum or the Commission has to
follow in future cases.

This Court is now taking up the cases before it for disposal as per
principles set out in earlier judgment. On taking the cases we find that
the copies of the Claim/Petitions made by the Respondent/Complainant
and the evidence, if any, led before the District Forum are not in the
paper book. This Court has before it the Order of the District Forum.
The facts are thus taken from that Order.

In this case, the Respondent was allotted a plot bearing No.
4/13(P) Sector, Hisar on 4th April 1986. The Respondent paid
substantial amounts but the possession was not delivered. Thus the
Respondent filed a complaint. On these facts, the District Forum

awarded interest @ 18% p.a. on the deposited amount.

The State Forum confirmed the Order of the District Forum but
reduced interest from 18% to 15%. The Appellants went in Revision
before the National Commission. The National Commission dismissed
the Revision filed by the Appellants relying upon its own decision in the
case of Haryana Urban Development Authority v. Darsh Kumar and
observing that interest @ 18% p.a. has been allowed by them under
similar circumstances. As has been stated in so many matters, the
Order of the National Commission cannot be sustained. It cannot
dispose of the matters by confirming award of interest in all matters
irrespective of the facts of that case. It must, on facts of a case, award
compensation/damage under appropriate heads if it comes to the
conclusion that such award is justified/necessary. Accordingly the Order
of the National Commission is set aside.

We are informed that the Appellants have offered possession on
22nd July 1997. Counsel had no instructions whether Respondent had
taken possession or not. Undoubtedly the Respondent will be entitled
to take possession, if he has not already taken possession. Appellants
will deliver possession without demanding any further or other

We are informed that the Respondent has paid a sum of
Rs.1,68,338.25. We however find from the copy of the allotment letter,
filed in this Court along with the affidavit of the Estate Officer dated 29th
July 2004, that a sum of Rs.1,68,186.50 was payable. In the affidavit
the following statement is made:

“The interest on the amounts deposited by the
respondent has been adjusted on 25.5.1998 for an amount
of Rs.2,49,829.65 at the interest rate of 15% p.a.”

Counsel had no instructions and could not explain what were the
amounts due from the Respondent which are supposed to have been
adjusted. As stated above Respondent has paid more than what he was
bound to pay. Also neither before the District Forum or the State
Forum or the National Commission and even in the Appeal Memo before
this Court is there a claim that Appellants have to recover amounts
from the Respondent. When the dispute has been subjudice the
Appellants are bound to put before the Court/Forum not just their
defence but also their claim/counterclaim, if any. Without permission of
Court the Appellants cannot set at naught awards of the Forum by
raising, outside Court, demands against the Respondents. It must be
remembered that the Appellants were to deliver possession within a
reasonable time. They do not offer possession till 22nd July 1997. As
can be seen from the Order of the District Forum possession was not
being offered because development work had not taken place. As they
were not in a position to deliver possession they cannot expect parties
like the Respondent i.e. allotees to keep on paying installments to
them. In such cases i.e. where Appellants are not in position to deliver
possession they cannot charge interest on delayed payments till after
they offer possession. Clause 6 of the letter of allotment also so
provides. It reads as follows:

“6. The balance amount i.e. Rs.1,26,139/50 of the above
tentative price of the plot/building can be paid in lump sum
without interest within 60 days from the date of issue of the
allotment letter or in six equal instalments. The first
instalment will fall due after the expiry of one year of the
date of issue of this letter. Each instalment would be
recoverable together with interest on the balance price at
10% interest on the remaining amount. The interest shall,
however accrue from the date of offer of possession.”

Thus, interest could only have been charged from date of offer of

As we are unable to understand and Counsel has no instructions
to be able to explain why extra payment has been collected and/or what
adjustments are purported to have been made, we direct that
Appellants shall now recalculate in the manner set out hereunder. In
this case, Appellants must pay interest at 15% from date of each
deposit till date of payment. They will not charge interest on delayed
payments prior to 22nd July 1997. If by that date the original price of
Rs.1,68,186.50 had been paid they will not be entitled to and will not
charge any interest. If anything extra is recovered they will repay that
back to the Respondent with interest thereon at 15% from the date of
such wrongful recovery till payment. We, however, clarify that if
Appellants have a claim and feel that they have to recover such
amounts from Respondent, they are at liberty to approach this Court for
clarification/modification of the Order and if on that application they are
permitted to so recover they may. But in the absence of any such
permission, they shall not recover anything extra/over and above the
allotment price of Rs.1,68,186.50.

Further, if TDS amount is deducted they will now pay that over to
the Respondent with interest thereon at the rate of 15% from date it
was so deposited till payment. Such recalculation to be made within 15
days from today and the amounts found due and payable to the
Respondent to be paid to him within 15 days thereafter. A compliance
report to be filed in this Court within one month from date. A copy of
the recalculation to be annexed to the compliance report.

We clarify that this Order shall not be taken as a precedent in any
other matter as the order is being passed taking into account special
features of the case. The Forum/Commission will follow the principles
laid down by this Court in the case of Ghaziabad Development Authority
vs. Balbir Singh
(supra) in future cases.

With these observations, the Appeal stands disposed of with no
order as to costs.

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