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Judgment
A. P. Sahi, President Member
An agreement between the Appellant developer and the respondent buyer was entered into on 23.10.2013 with a stipulation that the premises in question would be offered to the Complainant/Respondent within 30 months of the sanctioned plan. The agreement (described as a preliminary agreement) is on record and the relevant clause pertaining to the expected date of handing over possession as well as the undertaking regarding payment of delay compensation and also refund are contained in the agreement as follows:
“The process of obtaining all the statutory clearances and the sanction of the building plan are expected to be completed by 18 months from the date of this agreement by which time the differences/disputes in small patches of land within the project as mentioned herein above will also be settled by us in all reasonable manners.
The project, on receiving the sanction of plan, will be constructed phase wise and the blocks containing the UNIT referred above will be completed in first phase within a target of 30 months from the date of sanction.
· In case, due to reason beyond the control of the developer the project is delayed beyond the period as stated above, a compensation of 12% simple interest per annum on the payment made by the allottee will be paid by the developer for the period of delay. Purchaser is not free to cancel the agreement during the period of 18 months from the date of this agreement. However in some emergency case the company will refund the amount without any deduction and charges.
Parties agreed and subscribed their respective signature with seal being witneseth as follows.”
The Complainant was neither offered possession nor did the project commence as a result whereof the Complainant, vide mail dated, 18.06.2016 made a request for refund of the amount paid. The request for refund is extracted hereinunder:
“Managing Director
Shelter Infra Projects Ltd
DN 1, Sector V
Etemity Building
Salt Lake City
Kolkata 700 091
Dear sir,
We had invested a sum of Rs. 12,81,518/- as per the following details:
Chq#
Date
Drawn on
000002
21.07.2010
Kotak Bank
560346
27.07.2010
HDFC Bank
814730
27.07.2010
IDBI Bank
at your proposed project ANANDADHARA (Flat No. 17. C of Tower 1).
On the basis of the payment we had entered into an agreement on 23rd October 13, whereby you had agreed that the project will be formally launched within 18 months from the date of execution of the agreement. You also agreed to pay a compensation of 12% interest P.A. for the delayed period.
Unfortunately you could not start the project till date and neither have you provided us any assurance regarding the launch of the project.
Under the circumstances, we request you to return the amount paid by us in accordance with the undertaking of the above agreement within 30 days from the date of receiving this mail along with 12% interest as stated in the agreement.
Request you to mail the cheque at the following address
B 602, Jhulelal
16th Raod, Khar West
Mumbai 400052
Maharashtra
Thanking You
Swasti Sovan Bhowmick
Madhuri Bhowmick”
With no response, CC/569/2016 was filed by the Complainant alleging deficiency in service and unfair trade practice before the SCDRC West Bengal on 15.12.2016.
The Complaint has been allowed with the following reliefs:-
“The Opposite Parties are hereby directed to refund part consideration of Rs. 12,81,518/- already paid by the complainants along with interest @ 12% p.a. from the date of agreement till the date of realisation. Litigation cost of Rs. 50,000/- is also to be paid by the Opposite Parties to the complainants. The Opposite Parties will also pay Rs. 3,25,000/- as compensation for harassment.”
The Appeal has been preferred by the Developer/Builder on several grounds and a stay application was also moved. This Bench called upon the Appellant to deposit the principal amount and the interest at the rated of 9% at the time of admission, but the learned counsel prayed that he may be allowed to obtain instructions. The order dated 01.12.2023 is extracted hereinunder:
“Dated: 01.12.2023
ORDER
Learned Counsel for the Appellant prays that he may be allowed to obtain instructions with regard to the deposit of the principal amount and prima facie the interest at the rate of 9% on the main amount awarded in order to advance his submissions for the purpose of the admission of this appeal.
He prays the matter be listed on 18.01.2024.”
After instructions were obtained, learned Counsel for the Appellant stated that notices be issued and he would not press for any stay. The order dated 18.01.2024 is extracted hereinunder:
“Dated: 18.01.2023
ORDER
Heard learned Counsel for the Appellants who submits that he has instructions to state that the appeal can be proceeded on merits at this stage. The Appellant is not pressing for any stay.
The grounds taken in the appeal are only two fold namely that the interest awarded by the State Commission on refund at the rate of 12% on the amount referred to therein is on the higher side and secondly the award of Rs.3,25,000/- as compensation for harassment is unfounded and is not based on any cogent reason. The submission therefore is that the compensation part should also be set aside and the order of the State Commission should be modified accordingly.
Learned Counsel has cited the following decisions in support of his submissions:
Susheel Kumar Tanwar & Anr. Vs. Mantri Castles Pvt. Ltd. in CC/2553/2018 decided on 16.09.2022.
Shamik Bagchi and Anr. Vs. M/s. M.M Developers-Shramjivi and Ors. in CC/2062 & 2171/2016 and CC/125 & 458/2017 decided on 20.09.2022.
Ansal Lotus Melange Projects Pvt. Ltd. and Anr. Vs. Dr. Yuti Mukesh Mishra and Anr. in FA/867 & 868/2013 decided on 20.11.2018.
Manohar Infrastructure & Constructions Pvt. Ltd. Vs. Kapil Dua in FA/1516/2018 decided on 19.12.2022.
Omaxe Chandigarh Extension Developers Pvt. Ltd. (M/s. Golden Peak Township Pvt. Ltd.) and Ors. Vs. Harjit Kaur Sidhu in FA/832/2018 decided on 19.12.2022.
In view of the aforesaid submissions that have been advanced and since there is no stay application filed, let notice issue to the Respondents calling upon them to answer the aforesaid two submissions raised on behalf of the Appellant for an early disposal of the appeal at the admission stage itself. A copy of this order be produced by the Appellant before the State Commission.
Issue notice on the delay condonation application.
List on 27.05.2024.”
It is in the said background that after receiving the notices, the Respondents/Claimants have put in appearance through Counsel and the parties have agreed for the final hearing and disposal of the Appeal at this stage of admission itself.
At the outset, the delay condonation application was pressed into service for condoning the reported delay of 8 days. Having heard learned Counsel for the parties, the delay has been sufficiently explained and a plausible explanation has been given hence the delay deserves to be condoned. Accordingly, the delay condonation application is allowed and the appeal shall be treated to be within time.
As noted above, learned Counsel for both the parties have agreed to advance their submissions finally for disposal of this Appeal at this stage itself.
Learned Counsel for the Appellant urged that the 12% interest on the amount deposited by the claimant awarded by the State Commission is not in accordance with the agreement clause quoted above and even otherwise the Apex Court in several cases has been awarding interest ranging from 6% to 9%. Hence the prayer is that the rate of interest awarded by the State Commission be reduced from 12% to 9% and further the compensation of Rs.3,25,000/- should also be set aside as once refund is being allowed with interest thereon, then compensation over and above the same for harassment should not have been awarded.
Learned Counsel for the Respondent/Complainant has cited two judgments, the first being Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan (2019) 5 SCC 725 to contend that the term of a contract is final and binding but if it is shown that the flat purchaser had no option but to sign on the added law of the contract framed by the builder then the same shall not be final. The equitable rate of interest awarded therefore by the National Commission was therefore upheld. He has then cited the judgment of the Apex Court Venkataraman Krishnamurthy & Anr. Vs. Lodha Crown Buildmart Pvt. Ltd. (2024) 4 SCC 230 to urge that the rate of 12% as contained in the agreement is a binding provision of the contract and the ratio of the said decision squarely applies on the facts of the present case.
Having heard learned Counsel for the Parties, the terms of the agreement as extracted hereinabove clearly demonstrate that the rate of 12% of interest is payable on delay, which means delay in handing over possession or in other words delay compensation for late handing over possession beyond the expected date of delivery. The provision in this case as extracted above also indicates the option of refund to the builder without any deductions or charges. The agreement clause does not specify any rate of interest payable on refund. The 12% rate is confined only to delay compensation.
The question is whether the submission of the Appellant to pay only 9% interest is justified and reasonable.
In the given circumstances of the case the rate of interest as per the decisions of the Apex Court particularly in the case of Ireo Grace Realtech Pvt. Ltd Vs. Abhishek Khanna & Ors. (2021) 3 SCC 241, the rate of interest awarded is 9% but there are other decisions also where the rate of interest have varied from 6% to 12% and a recent case of the Apex Court to the tune of 18% on the facts of that case. These have been referred to in FA/856/2020 and other connected matters decided by this Bench on 06.05.2024.
Applying the mean value and the circumstances of the present case there appears to be a modification which deserves to be considered even though the Respondents/Complainants have not filed any Appeal questioning the date from which the interest has to be paid. The State Commission has granted the interest of 12% from the date of the agreement till the date of actual payment. Ideally, this should have been from the date of respective deposits made by the Complainant till the date of actual payment, but then the rate of interest ought to be in that contingency 9%p.a.
However, since the State Commission has granted 12% interest from the date of agreement which is a subsequent date and all the payments were made much before the agreement, this Commission does not find it appropriate to alter the rate of interest which deserves to be confirmed @ 12%. It may be not out of context to mention that the agreement itself in the matter of delay compensation provides for 12% interest. Consequently for all the reasons above, the rate of interest of 12% as awarded by the State Commission is confirmed. The equities are therefore balanced and hence no effective purpose would be served by reducing the rate of interest and shifting the date backwards.
However there is a direction to pay Rs.3,25,000/- as compensation for harassment. This is not preceded by any discussion as to how the State Commission came to the Conclusion that the Complainants need to be compensated for harassment to the tune of Rs.3,25,000/-. In the absence of any such exercise undertaken to compute the same and in view of the decisions relied on by the learned Counsel for the Appellant, the direction for awarding Rs.3,25,000/- as compensation therefore deserves to be set aside. This is more so when 12% interest has been granted on the refund amount. Cost of litigation as awarded is also confirmed.
Accordingly, the Appeal is partly allowed. The award of Rs.3,25,000/- as compensation is set aside and to that extent only the order and decree of the State Commission shall stand modified. The rest of the order of the State Commission is confirmed. Appeal disposed of with the aforesaid directions.