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Judgment
This first appeal has been filed by the appellant MK Abdul Saleem against the order dated 31.10.2014 of the State Consumer Disputes Redressal Commission, Kerala, (in short 'the State Commission') passed in CC No.74/2012.
Brief facts of the case are that appellant/ complainant booked a flat with the respondents/opposite parties. He entered into an agreement on 19.7.2007 and respondents/opposite parties agreed to deliver the possession by September, 2009. Total sale consideration was Rs.34,98,380/-. As on 16.12.2008, total sum of Rs.27,73,568/- was already paid by the complainant. Date of possession was unilaterally changed by the opposite parties several times and finally announced to hand it over in December, 2011. Complainant had availed huge loan for investment in flat and due to no hope of the completion of the project, complainant suffered heart attack. Ultimately, appellant/complainant decided to withdraw from the project, on 15.10.2012, he requested respondents/opposite parties to return the amount paid. On 18.11.2012, the respondents/opposite parties declined to refund the amount. Hence, the complainant filed a consumer complaint before the State Commission.
The complaint was resisted by the respondents/opposite parties on the ground that they agreed that there was delay in their work due to financial problems, but they mentioned that whole project will be completed by December, 2013, but as complainant demanded refund, they have already paid off the bank loan availed by the complainant with interest and now only Rs.5,33,440/- paid by the complainant in cash remains to be refunded to him. The State Commission passed the following orders vide order dated 31.10.2014:-
"In the result, the first opp.party is directed to pay interest to the complainant for the sum of Rs.5,43,440/- at the rate of 9% per annum from the date of receipt till date of payment. The first opp.party is also directed to pay compensation of Rs.2,00,000/- and cost of Rs.10,000/- to the complainant for the deficiency in service committed by them. The order shall be complied with within one month from the date of this order failing which the compensation amount would carry interest at the rate of 9% per annum."
Hence the present appeal.
Heard the learned counsel for the appellant and the learned counsel for respondent Nos.1 & 2. Respondent No.3 was proceeded ex-parte vide order dated 22.01.2018.
The learned counsel for the appellant stated that the flat was booked by paying Rs.5,43,440/- in cash. Later on Rs.22,30,128/- was paid by complainant through Federal Bank Housing loan. Extended possession was due by December, 2011, however, the flat was not ready till December, 2012. No offer of possession was given, therefore, the complainant requested for refund of the paid amount. The opposite parties first refused to refund the amount. However, the opposite parties refunded the total loan amount of Rs.22,30,128/- to the bank and the loan account was closed on 24.09.2013. However, the amount of Rs.5,43,440/- was not refunded to the complainant. When the complaint was filed, after the order of the State Commission, this amount was also refunded without any interest. The opposite parties remitted Rs.5,43,440/- on 22.10.2013. In the final order passed by the State Commission, though the State Commission has given interest on this amount, however, the State Commission has not considered the payment of Rs.14,02,876/-, which was the interest and other charges paid to the bank by the complainant before the loan account was closed. This is clear from the statement of account issued by the Federal Bank dated 24.10.2013 wherein at the end of the account statement, interest and other charges Rs.14,02,876/- is mentioned. Thus, apart from the interest on Rs.5,43,440/-, complainant is also entitled to Rs.14,02,876/- as interest and other charges which have been paid by the complainant to the Federal Bank. In fact the amount of Rs.22,30,128/- was transferred to the opposite parties from 15.09.2008 till 01.1.2009. Hence EMI was to start from 15.4.2010 and since then, the complainant has paid all the EMIs and the loan has been closed by opposite parties by paying only the principal amount of Rs.22,30,128/-. Thus, all the interest burden has been suffered by the complainant. It was further argued by the learned counsel that the State Commission awarded only 9% p.a. interest on the amount of Rs.5,43,440/- whereas the trend in most of the cases of refund is to refund with interest @18% p.a. It was requested that the rate of interest be increased from 9% p.a. to 18% pa.
On the other hand, learned counsel for the opposite parties stated that the complainant is not a consumer and he is an investor, who lives in Dubai and invested money in India. Learned counsel further stated that this point was not raised before the State Commission, however, he is raising this point in appeal. Learned counsel further stated that all the bank loan of the complainant has been repaid by the opposite parties and the loan account of the complainant has been closed. The amount paid by the complainant was also remitted to the complainant though without interest. The opposite parties are ready to pay interest @9% p.a. as ordered by the State Commission as no appeal has been filed by the opposite parties. It was argued by the learned counsel that when total loan account has been closed after repaying total loan amount, the opposite parties are not liable to pay amount of Rs.14,02,876/- as interest and other charges.
I have carefully considered the arguments advanced by the learned counsel for the parties and have examined the record. The State Commission has allowed the refund of Rs.5,43,440/-. Recently, the Hon'ble Supreme Court in Kolkata West International Pvt. Ltd. Vs. Deva Asis Rudra, II (2019) CPJ 29 (SC) has reduced the rate of interest of 12% p.a. granted by this Commission to 9% p.a. on the amount of refund and therefore, there is no justification in the request of the appellant that the interest rate may be increased. The interest rate @9% p.a. on the amount of refund is quite reasonable looking at rate of interest prevailing in the banks.
It is true that the complainant has paid interest in the form of EMI to the bank along with other charges before closure of the loan account. It is mentioned that Rs.14,02,876/- has been paid as interest and other charges. It is also seen from the loan account that on certain occasions there are certain charges which are mentioned and may be related to delay in EMI payment etc. As this is a case of refund and the money has remained with the opposite parties from 01.01.2009 till 24.09.2013 and the complainant was paying EMIs during this period, the complainant is definitely entitled to interest on the amount, as observed by the Hon'ble Supreme Court in Alok Shanker Pandey Vs. Union of India &Ors., II (2007) CPJ 3 (SC), wherein the following has been held:-
"9. It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B."
On the basis of the above discussion, the first appeal No.162 of 2015 is partly allowed and the respondent No.1/opposite party No.1 is directed to pay interest @9% p.a. on the amount of Rs.22,30,128/- from 01.01.2009 till 23.9.2013. However, as the interest is being awarded on the total amount of refund without any deduction of any earnest money, there is no justification for award of compensation of Rs.2,00,000/-. Hence, the order of the State Commission in respect of award of Rs.2,00,000/- as compensation is set aside, though the award of interest 9% p.a. on the amount of Rs.5,43,440/- and the award cost of litigation Rs.10,000/- is maintained. The order be complied with by the respondent No.1/opposite party No.1 within 45 days from the date of receipt/service of this order.