Manohar Infrastructure & Constructions Private Limited & Anr vs Vipul Sehgal & 3 Ors

Subhash Chandra, Presiding Member

This appeal has been filed under section 51 of the Consumer Protection Act, 2019 (in short, ‘the Act’) assailing the order of the State Consumer Disputes Redressal Commission, U T Chandigarh (in short, ‘the State Commission’) in CC no. 232 of 2019 dated 22.11.2021. The impugned order directs the respondent to:

i. Refund the amount of Rs.34,25,000/- to the complainants, alongwith compensation by way of interest @12% p.a., without deducting any TDS, from the respective dates of deposit onwards, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.

ii. Pay compensation for causing mental agony and physical harassment; deficiency in providing service and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.1,25,000/- to the complainants within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount shall carry interest @9% p.a. from the date of passing of this order, till realization.

iii. Pay compensation to the tune of Rs.50,000/- as held in para no.13 above, within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount shall carry interest @9% p.a. from the date of passing of this order, till realization.

The appellant has only argued seeking review of the impugned order on the grounds that the rate of interest awarded by way of compensation of 12% is excessive and contrary to the rate of interest being awarded in such matters by the Hon’ble Supreme Court as well as this Commission. Learned counsel for the appellant also assailed the order on the grounds that the State Commission has awarded, in addition to the interest, additional compensation of Rs.1,25,000/- for mental agony and cost of litigation and further compensation of Rs.50,000/-.

We have heard the learned counsel for both the parties.

The appellant has limited his arguments only to the rate of interest and compensation and quantum of compensation as mentioned above. It is argued that in view of the compensation being awarded in the form of interest on the amount deposited with the opposite party/ appellant, the additional compensation and compensation for mental agony is excessive in view of the catena of judgments of the Hon’ble Supreme Court and this Commission. Learned counsel for the respondent submits that he has been dragged by the appellant to this Commission and also to the Hon’ble Supreme Court and therefore, he may be compensated adequately.

Learned counsel for the appellant has also submitted that 50% of the decretal amount already stood deposited with the State Commission and that he would be willing to deposit the balance 50% within a reasonable period of time.

We have perused the records and have given our thoughtful consideration to and have carefully perused the material on record. It is manifest that the respondent had booked a plot in the appellant’s project called ‘The Palm’ in the month of February 2011 and the total sale consideration of the said plot was Rs.55,00,000/- and the respondent has paid Rs. 34,35,000/- towards the sale consideration. The respondent was allotted plot no.1116 in the said project. However, the appellant failed to hand over the possession of the plot to the respondent. No Buyer’s Agreement was executed between the parties. Hence, the State Commission had allowed the complaint holding that deficiency in service on the part of the appellant herein stood established.

Arguments of the learned counsel for the parties were considered. In Kolkata West International City Pvt. Ltd. Vs Devasis Rudra, Civil Appeal No. 3182 of 2019 decided on 25.03.2019, the Hon’ble Supreme Court laid down that:

“It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession”.

In the instant case, the respondent had booked the flat in question on 25.02.2011 and has not been handed over possession till the filing of the complaint. Admittedly, no offer of possession had been made till date. Hence the delay is considered to be inordinate. In Experion Developers Pvt. Ltd. Vs Sushma Ashok Shiroor, C.A. No. 6044 of 2019 decided on 07.04.2022 the Hon’ble Supreme Court has laid down that interest awarded by way of compensation should be both compensatory and restitutionary and that the rate of interest of 9% is fair and just. In the light of the foregoing, the award of 12% awarded by the State Commission appears to be excessive.

It has also been held by the Hon’ble Supreme Court in DLF Homes Panchkula Pvt. Ltd., vs D S Dhanda (2020) 16 SCC 318, that for a singular defect, the award of multiple compensation is not justified. Hence, the award of compensation for mental agony and compensation separately in addition to compensation by way of interest on the deposited amount is not considered to be justified.

The counsel for the respondent argued that this case is covered by this Commission in the case of Manohar Infrastructure and Constructions Pvt., Ltd., vs Daljit Singh in FA no.1228 of 2018 decided on 19.12.2022 and Manohar Infrastructure and Constructions Pvt. Ltd., vs Ankit Jain in FA No. 185 of 2020 decided on 17.05.2022. From the facts of these cases, it is clear that the case on hand is squarely covered by the cases cited.

In view of the foregoing, the appeal is partly allowed and the orders of the State Commission are upheld with the following modifications:

a. The amount deposited with the State Commission shall be released along with accrued interest hereon within four weeks;

b. The amount of Rs.34,25,000/- shall be refunded within twelve weeks in one instalment along with interest @ 9% from the respective dates of deposit till the date of realisation. In case of any delay beyond this period, the rate of interest applicable would be 12% simple interest;

c. Appellant shall also pay the respondent litigation cost of Rs.75,000/-; and

d. Compensation for mental agony and compensation of Rs.50,000/- are set aside.

All pending IAs are also stand disposed of by this order.