Ghaziabad Development Authority vs Ajay Kumar Sood

A. P. Sahi, President Member

This Appeal questions the correctness of the Impugned Order of the State Consumer Disputes Redressal Commission, Uttar Pradesh dated 05.01.2023, whereby the Complaint filed by the Opposite Party was allowed keeping in view the background that the premises of 2 BHK in the Indirapuram Awas Yojna, Ghaziabad which was promised to be delivered to the Opposite Party never saw the light of the day as the scheme itself was cancelled by the Ghaziabad Development Authority / Appellant herein not once but on couple of occasions as a result whereof the Complainant was compelled to institute the Complaint.

The Appeal was entertained after condoning the delay and was admitted. Learned Counsel for the Complainant / Respondent prayed for an interim relief as well and submitted that this Appeal can be disposed of as the refund was not being disputed, it is only the amount of interest which is to be computed that may be payable and which has been awarded by the State Commission, Uttar Pradesh as per the chart that was appended as Annexure 33 to the Complaint.

The Impugned Order also awards Rs.10,00,000/- as compensation for harassment which has also been assailed and it is urged by the learned Counsel for the Appellant that the interest awarded by the State Commission at 18% as claimed and the compensation for harassment of Rs.10,00,000/- are excessive. The interest is on the higher side and she submits that no compensation is payable for harassment once the refund has been allowed together with interest. The Appellant was directed to pay the entire amount of Rs.22,48,327/- within a period of two months. A cost of Rs.50,000/- has also been awarded which is under challenge.

Learned Counsel for the Appellant contends that there was no fault on the part of the Authority and it is not a profit making body but an Autonomous Organization of the Government hence the conclusion drawn by the State Commission that there was deficiency in service on the part of the Authority is incorrect. It is submitted that the project could not proceed as the land on which the project was to be developed was under litigation and the same could not be secured for the purposes of offering the flats to the allottees as per the terms of the allotment Orders. However, alternative arrangements were made by offering the premises at a different location, first at Indirapuram Nyaya Extension which also could not fructify because of the non-availability of land and then it was offered at Madhuban Bapudham.

It is therefore submitted that in the absence of any such deliberate and willful deficiency on the part of the Appellant, the State Commission ought not to have awarded the relief of refund at an excessive rate of interest of 18% and awarded an amount of Rs.10,00,000/- as compensation towards harassment. Learned Counsel for the Appellant has cited two judgments of this Commission, namely Jagannathi Devi through Lakhan Lal Gupta verus Lucknow Development Authority through its Vice Chairman in First Appeal No. 863 of 2021 decided on 05.09.2023 and Meerut Development Authority versus Jagdish Chand Gupta reported in Miscellaneous Application No. 219 of 2021 in Revision Petition No. 2353 of 2011 decided on 29.04.2022 to contend that even otherwise the rate of interest as awarded on the refund amount should not exceed 9%.

Learned Counsel for the Complainant / Respondent submits that deficiency in service is clearly established from the admission of the authority itself and which stands recorded in detail in the Order of the State Commission. In the circumstances, the rate of interest as claimed for the refund along with the refund was rightly awarded. The element of harassment has been also established with the Ghaziabad Development Authority proceeding to offer allotment one after the other at alternative places making the Complainant wait endlessly without any result. He therefore submits that the harassment compensation should not be reduced and consequently in the light of the findings recorded by the State Commission, the Appeal deserves to be dismissed. He further submits that when it comes to the Ghaziabad Development Authority under the schemes, they claim and levy 15% penal interest which is evident from the terms and conditions of the allotment that cannot be lost sight of.

Having considered the submissions raised the fact that the premises offered could not take the shape of any actual conveyance is established. The findings of the State Commission on that ground cannot be faulted with on any score. Consequently the Respondent / Complainant is entitled to the entire amount that has been deposited by him which is not disputed and it is to the tune of Rs.35,36,151/-. As stated by the Appellant the same has now been refunded. The second item claimed is on account of the housing loan that was taken by the Complainant for which a tri-partite agreement was also entering into resulted in another amount of Rs.2,03,448/- paid as interest on the amount that has been taken as loan. This amount was definitely incurred by the Respondent / Complainant because of non-delivery of the premises and the interest had to be borne by the Complainant, and hence the aforesaid amount also cannot be disputed which deserves to be saddled on the Appellant. The State Commission was therefore justified in arriving at that conclusion.

The third amount is with regard to compulsory insurance to cover the risk that had to be undertaken for the property under the scheme for which a premium of Rs.1,24,000/- was paid by the Complainant. For the same reason this amount also had to be borne by the Appellant as it was on the promise of the Appellant that the Respondent / Complainant had proceeded to incur the aforesaid liability of the Insurance Premium.

Coming to the issue of interest it has been canvassed by the learned Counsel for the Appellant that a rate of 9% has been awarded in different forms of refund as per the judgments that have been relied on. It is evident that in the said cases this Commission had modified certain orders relating to the rate of interest and has proceeded to award 9% interest on refund depending on the facts of each case. In the case of Jagannathi Devi (Supra) the refund of the amount had been sanctioned by the Vice Chairman of the Lucknow Development Authority whereas in the present case the Complainant had to contest for his rights in the background that the offer of the premises was altered atleast thrice as is evident from the facts on record. Therefore the facts of this case are different and are distinguishable as against the case of Jagannatha Devi. The Meerut Development Authority case also does not squarely apply as the manner in which the Ghaziabad Development Authority has in this case proceeded to first offer the alternatives and then ultimately offered the Respondent a refund. It was after this prolonged and protracted period right from 2014 till 2017 and then after the institution of the Complaint that the Complainant had to struggle for the refund of his amount. There is yet another reason namely that when it comes to the Authority, it is authorized to charge penal interest at 15% as per the terms of the allotment. This term is therefore reflective of the contract to recover interest. In this background and in the peculiar facts the Respondent / Complainant deserves a higher rate of interest and therefore the Order of the State Commission in so far as interest is concerned is modified to 12% which shall be calculated and paid from the date of each of the respective deposits. This rate of interest being awarded keeping in view the ratio of the decision in the case of Sovintorg (Indoa) Limited versus State Bank of India 1999 (6) SCC 406 as followed in Ghaziabad Development Authority versus Union of India 2000 (6) SCC 113 (Para 9 and 10) where 12% interest was found adequate. The Impugned Judgment to that extent shall stand modified and the refund recalculated accordingly.

Coming to the issue of harassment, a sum of Rs.10,00,000/- has been awarded. In the opinion of this Commission, keeping in view the continuous harassment of the Respondent / Complainant as noted herein above in making him wait endlessly for a long period with uncertainty the same is reduced to Rs.7,50,000/- as against Rs.10,00,0000/- as awarded by the State Commission and shall be paid with the cost of litigation of Rs.50,000/- which does not deserve to be reduced.

The issue of mental agony was dealt with and denied in the case of Ghaziabad Development Authority (Supra) but in a later case this was explained in detail in the case of Ghaziabad Development Authority versus Balbir Singh (5) SCC 65 where the Apex Court came to the conclusion that compensation for harassment can be granted in convincing circumstances. In this case applying the principles of Balbir Singh case (Supra) the Authority realized the amount from the Complainant who is a senior citizen awaiting for his dreams to be fulfilled for a roof over his head and for his family for years together, was left only with a fond hope on a promise that hopped from one scheme to another like a mirage with nothing in the end. Harassment is immense worry resulting in distress. In the present case it went on compounding and progressing each time with a change of offer and then the climax of an empty expectation with a desperate option of refund.

Appeal stands disposed of and the Order of the State Commission is upheld accordingly with the aforesaid modifications.

The amount which has already refunded by the Ghaziabad Development Authority shall be adjusted and calculated at the final stage itself during executing proceedings. It is stated that the execution proceedings have commenced. Let a copy of this order be placed on record thereof.