ATS Estate Pvt. Ltd vs Meenu Yadav

This appeal has been filed by the appellant ATS Estates Pvt. Ltd., against the order dated 21.12.2017 passed by the Punjab State Consumer Disputes Redressal Commission, Chandigarh ('the State Commission') in Compliant no. 402 of 2016.

The brief facts of the case relevant for deciding the present appeal are that the respondent/ complainant booked a flat in the project of the appellant and the builder buyer agreement was signed on 15.01.2013. As per the builder buyer agreement, the possession was to be handed over to the complainant within 36 months from the date of commencement of the construction of the concerned Tower along with a grace period of six months. The possession was expected by June 2016, however, the flat was not ready and no offer of possession was received by the complainant by this time. The complainant then asked the opposite party to communicate the probable date of possession. It is the case of the complainant that the opposite party told that the flat would be ready by December 2017. The complainant was not satisfied with the progress of the construction of the building and according to the complainant it was not possible to get the flat by December 2017. The complainant then filed a consumer complaint for refund of the paid amount. Against the total consideration of Rs.43,70,000/- the complainant had paid Rs.30,92,700/-. The State Commission allowed the complaint and passed an order of refund dated 21.12.2017 as under:

"Sequel to the above, we accept the complaint and ordered the OP as under:

(i) To refund the sum of Rs.30,92,700/- along with interest at the rate of 12% per annum from the various dates of payment till payment;

(ii) To pay Rs.1,00,000/- as compensation on account of mental agony and physical harassment to the complainant;

(iii) To pay Rs.21,000/- as litigation expenses.

Hence, the present appeal.

Heard the learned counsel for the appellant and the respondent in person. The learned counsel for the appellant stated that if there has been only a delay of about one year in giving possession, this cannot be a reason for seeking refund as there is sufficient provision in the agreement for compensation to be given to the complainant if the project is delayed. It was argued that in large projects delay of one year is very common and complainant cannot claim the refund of the total amount. There is also a provision in the agreement that if the allottee wants refund due to delay in possession, the money will be refunded without any interest to the complainant. Thus, from both the considerations the order of the State Commission is not sustainable. It was further argued that the State Commission has awarded the interest @ 12% p.a. on the amount of refund whereas the Hon'ble Supreme Court has awarded only 9% interest on refund in the case of Krishna Bhagya Jala Nigam Ltd. Vs. G.harischandra Reddy and anr., (2007) 2 SCC 720, wherein it has been observed:-

"11. On the merits of the claims made by the contractor we find from the impugned Award dated 25.6.2000 that it contains several Heads. The Arbitrator has meticulously examined the claims of the contractor under each separate Heads. We do not see any reason to interfere except on the rates of interest and on the quantum awarded for letting machines of the contractor remaining idle for the periods mentioned in the Award. Here also we may add that we do not wish to interfere with the Award except to say that after economic reforms in our country the interest regime has changed and the rates have substantially reduced and, therefore, we are of the view that the interest awarded by the Arbitrator at 18% for the pre-arbitration period, for the pendente lite period and future interest be reduced to 9%.

It was further stated by the learned counsel for the appellant that there is a delay of 12 days in filing the appeal and therefore, the delay may be condoned on the ground mentioned in the application for condonation of delay.

The learned counsel for the appellant further argued that the appellant has already deposited the total awarded amount with the State Commission in the execution case. However, this should not weaken the case of the appellant.

The award of Rs.1.00 lakh as compensation granted by the State Commission to the complainant was also challenged by the learned counsel for the appellant on the ground that no separate compensation is justified when interest has been granted by the State Commission.

On the other hand the respondent/ complainant stated that there was no hope that the flat would have been ready by December 2017 the date promised by the opposite party. It is stated that the building is not complete even in May 2018. It was further stated that the complainant had demanded refund with 18% per annum rate of interest, however, the State Commission has allowed only 12% per annum rate of interest on the amount of refund. In respect of the compensation of Rs.1,00,000/- it was stated that it is very meagre compensation awarded to the complainant looking at the harassment and mental agony suffered by the complainant.

I have carefully examined the documents available on the case file and also considered the arguments advanced by both the parties. The main challenge in the appeal is in respect of the rate of interest and the amount of compensation of Rs.1,00,000/-. Before considering these two aspects it is seen that the possession was due in June 2016 and the complainant was informed that the flat will be ready by December 2017. This was not a long delay keeping the nature of the project in view. Moreover, a compensatory mechanism was already available in the agreement. The complaint was filed even before the date that was promised by the opposite party although, this date was not as per the agreement but it was about one and a half years later. It is not the case of the complainant that the building was not coming up and the construction was stopped and there was no hope of getting the flat. Though, legally complainant is entitled to seek refund when the due date of possession expired but this also reflects the urgency of the complainant to withdraw from the project as quickly as possible as if the complainant was not requiring the booked accommodation and he had booked this flat for earning higher interest on his investment.

Clearly the order of the State Commission allowing refund of the paid amount cannot be faulted with however, in the facts and circumstances of the case, the interest of 12% per annum granted by the State Commission seems to be slightly on a higher side. Learned counsel for the appellant has referred to the judgment of Hon'ble Supreme Court in Krishna Bhagya Jala Nigam Ltd. Vs. G.harischandra Reddy and anr."(supra) where the Hon'ble Supreme Court has allowed interest of only 9% per annum. Moreover, in a recent case Hon'ble Supreme Court in Kolkata West International Pvt. Ltd. Vs. Deva Asis Rudra, II (2019) CPJ 29 (SC) has reduced the rate of 12% per annum granted by this Commission on the amount of refund to 9% per annum. Thus in the facts and circumstances of the present case, it is appropriate to amend the order of the State Commission to the extent that the rate of interest will be 9% per annum instead of 12% per annum.

As this Commission is granting relief to the appellant by reducing the rate of interest on the amount of refund, I do not find any merit in the prayer of the appellant that the compensation granted by the State Commission be reduced or set aside.

Based on the above discussion, the appeal NO.569 of 2018 is partly allowed and the order of the State Commission is modified to the extent that the rate of interest on the amount of refund shall be 9% per annum instead of 12% per annum as granted by the State Commission. Rest of the order of the State Commission is upheld. Parties to bear their own costs for the present appeal.