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Judgment
Sudip Ahluwalia, Member
This Appeal has been filed by the Appellants/Opposite Parties against Respondents/Complainants challenging the impugned Order dated 02.05.2017 passed by the State Consumer Disputes Redressal Commission, Lucknow, UP, in Complaint bearing No. 173 of 2015. Vide such Order, the State Commission had allowed the Complaint against the Opposite Party No.1.
The brief facts of the case are that the Opposite Party No.1 (a joint venture of the Opposite Parties No.2, 3 and 4) had launched a scheme for providing Flats in Noida. Based on the inducements of the Opposite Party No.1, the Complainants had applied for a Flat bearing No. 1103 on the 11th Floor having super area of 1775 sq. ft. on 28.09.2011 in ‘Pan Oasis’ situated at Sector-70, Noida. The total cost of the Flat was Rs.66,66,875/- out of which the Complainants had deposited Rs.6,00,833/- at the time of Application. Thereafter the Opposite Party had provisionally allotted and confirmed the provisional booking of Flat F-1103 vide letter dated 21.10.2011. In pursuance of the Allotment Letter, a Flat Buyer Agreement was entered into between the parties on 22.10.2011. In order to make payments to the Opposite Party, the Complainants had taken a loan of Rs.42,00,000/- vide sanction letter dated 30.11.2011 from Bank of Baroda, Halwai Chowk Branch, Badaun, at the rate of interest 10.05%+1.50% p.a. subject to change of base rate. Consequently, after release of the loan, a sum of Rs.51,07,081/- was deposited with the Opposite Party on 21.12.2011.
It was the case of the Complainants that the Opposite party had failed to start the work of construction and handover possession despite receiving the entire cost of the Flat. As per clause 21 of the Agreement, the Opposite party had to deliver the possession of the Flat within a period of 36 months from the date of signing of the Agreement and with a further grace period of 3 months. It was stated by the Complainants that the Opposite Party had failed to handover the possession and execute Sale Deed of the Flat. Therefore, the Complainants sent a Legal Notice dated 21.04.2015 to the Opposite Party demanding possession or refund along with interest which was replied to by the Opposite Party on 30.04.2015 stating that the National Green Tribunal had passed a verdict thereby restraining the construction in the vicinity thereof, due towhich the Opposite Party was unable to complete the construction. Therefore being aggrieved by the acts of the Opposite Party in failing to deliver the possession or refunding the sum paid and alleging deficiency in services, the Complaint was filed before the Ld. State Commission seeking refund of Rs.57,07,914/- along with interest @18% p.a. from 22.12.2011 till actual payment, compensation of Rs.10,00,000/-, Rs.5,00,000/- towards unfair trade practice and Litigation costs.
The Ld. State Commission vide its impugned Order dated 02.05.2017 had noted that the Ld. Counsel for the Opposite Parties No.1 and 3 had appeared before it but had failed to file any written statement within the stipulated time period prescribed u/s 13(2) of the Consumer Protection Act. Hence, the Order for proceeding Ex-parte against them was passed. It was further noted that the Opposite Parties No. 2 and 4 had failed to appear despite sufficient service. Hence, they were also proceeded against Ex-parte. It was also noted by the Ld. State Commission that the Opposite Party No.1 had filed an Affidavit admitting delay in construction of the tower of Flats pertaining to the Complainant, which was caused due to Force Majeure i.e., stay imposed by the Green Tribunal; stating that the Complainant had never demanded his deposited money and further stating that if the Complainant wishes to withdraw the money, the Opposite Party No.1 was willing to refund the sum paid after deductions as per the Agreement.
The Ld. State Commission vide its impugned Order had observed that no copy of Green Tribunal’s order was filed on record; that the delay in construction of the Flat was not caused due to the Complainants; as per the Agreement; that the Complainants were to be handed over possession of the Flat within 36 months and a further grace period of 03 months i.e., by 21.04.2015; that the Opposite Party No.1 has not handed over possession of the Flat by completing the construction; that the Complainants had paid a total sum of Rs.57,07,914/-; that they had deposited a partial sum of Rs.42 Lacs by taking a loan from Bank of Baroda @ 12.25% interest p.a. and that the opposite Party No.2 has benefited by taking the sum paid from the Complainant. Therefore, the Ld. State Commission was of the view that the Opposite Party No.1 has committed deficiency in services and is liable to refund the sum paid by the Complainants along with interest and further observed that there is no proper base for deduction. Therefore, the Complaint was allowed against the Opposite Party No.1 with a direction to pay Rs.57,07,914/- along with interest @15% p.a. w.ef. date of payment till realization and Rs.10,000/- as litigation expenses.
Aggrieved by the above Order, First Appeal bearing No. 1806 of 2017 has been filed by Appellants/Opposite Parties against the Respondents/ Complainants before this Commission.
Heard the Ld. Counsels for Appellants and Respondents. Perused the material available on record.
As already noted, the Respondent Nos. 1 & 3 had appeared before the Ld. State Commission but on account of their failure to file their Written Version within the stipulated period under Section 13(2) of the Consumer Protection Act, the proceedings were held Exparte against them while the Respondent Nos. 2 & 4 did not appear at all in the State Commission in spite of due service of Notice. Consequently, the Impugned Order passed against them is in a virtually uncontested scenario.
Now, it is the original Opposite Parties who have challenged the Impugned Order on the limited question that the interest component awarded to the Complainants is exorbitant, and not in consonance with the decision of the Hon’ble Supreme Court in the case of “Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, in Civil Appeal No.6044 of 2019, decided on 7.4.2022” where it was held inter alia:-
“…32. We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the Order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. Vs. DS Dhanda and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the Appeal filed by purchaser deserves to be partly allowed. The interest shall be payable from the dates of such deposits.
At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just and we find no reason to interfere in the appeal filed by the consumer for enhancement of interest……”
The Ld. Counsel for the Respondents from their side have, however, resisted this contention by drawing our attention to the fact that the Ld. State Commission had taken note that the Respondents had to raise a loan of Rs. 42.00 lakhs from Bank of Baroda and deposited the same with the Appellants towards the cost of the Flat. The interest on EMIs payable by the Respondents to the Bank of Baroda is @ 12.25% p.a. on monthly balance. The Ld. Counsel argued that the EMIs being paid on monthly balance @ 12.25% in fact amount to14% effectively. In our view, it appears to be an untenable contention wherein when EMIs are paid based on monthly reducing balances, the overall interest rate should in fact remain stable, if not verge towards either lower rate of interest or reduced months of EMI. In any case, the Complainants have not led any evidence indicating increase in the effective interest rate when EMIs on the Bank loan are paid on monthly balances. Therefore, we do not find merit in this contention of the Ld. Counsel for the Respondents for claiming 15% interest.
At any rate, in the case of “Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor” (supra), the Hon’ble Apex Court in such a situation has held that in such cases of complete refund of the deposited amounts where possession of the dwelling units is not within the reasonable time, the interest @ 9% p.a. is considered to be fair and just. We, therefore, find merit in the submission made on behalf of the Appellants.
The Appeal is consequently allowed in part to the extent that the rate of interest on the amount ordered to be refunded by the Ld. State Commission shall be @ 9% p.a. instead of 15% p.a., and the litigation expenses (which were described as complete expenses by the Ld. State Commission) assessed at Rs. 10,000/- shall be enhanced to Rs. 50,000/-. All outstanding payments by the Appellants in terms of this order shall now to be paid up to the Respondents/Complainants, within 02 months from the date of this order. In the event of non-compliance of this Order, the outstanding amount to be paid shall attract a penal interest of 12%.
Pending application(s), if any, also stand disposed off as having been rendered infructuous.