M/S. Vindhya Projects Pvt. Ltd. & Anr vs Susobhan Chakraborty & 7 Ors

This appeal has been filed by the appellant M/s. Vindhya Projects Pvt. Ltd. & Anr. against the order dated 16.01.2018 of the State Consumer Disputes Redressal Commission, West Bengal (in short 'the State Commission') passed in Complaint Case No.CC/51/2010.

Brief facts of the case are that the opposite party No.1/appellant were to construct two multistorey residential buildings complex comprising of 25 flats to be known as Vindhya gardens. The respondent Nos.1 & 2/complainants booked a flat in the complex. Total amount paid by the complainants was Rs.14,38,687/- and the same was paid to the opposite party No.1 for the said flat. On 05.10.2005 agreement was signed between opposite party No.1, land owners and the complainants. On 10.05.2007 opposite party No.2/appellant wrote letter to complainants to take possession of their flat and car parking space on or from June 3, 2007. When complainants reached the site, opposite parties failed to deliver possession to the complainants. The complainants then filed a consumer complaint before the State Commission bearing No.CC/51/2010. The State Commission passed the order of refund as follows:-

"Accordingly we allow the petition of complaint and direct the OPs no.1 and 2 to refund the amount to the tune of Rs.14,38,687/- (Rupees fourteen lakh thirty eight thousand six hundred eighty seven) as they received the same from the complainants on different dates with simple interest which should be @9% per annum from the date of payment till the date of realization and the complainant would be entitled to get compensation to the tune of Rs.2,00,000/- (Rupees two lakh) and Rs.20,000/- (Rupees twenty thousand) towards mental agony and cost of litigation and in our considered opinion such order will serve the ends of justice. Hence, we allow the petition of complaint on the above terms. Order is passed accordingly."

Aggrieved by the order of the State Commission, the appellants/opposite parties No.1 & 2 have filed the present appeal.

Heard the learned counsel for the appellants who stated that the opposite parties have already constructed the building and the possession was offered to the complainants. There were various court cases between the developers and the land owners and that is why the delay has occurred. The State Commission has not considered various orders passed in the litigation between the land owners and the developers i.e. the appellants and passed the order of refund of the deposited amount without taking cognizance of the fact that the appellants have already invested the money in construction of the flat. It was further stated by the learned counsel that the State Commission has awarded interest @9% per annum on the amount of refund which is not justified as there is no agreement for this interest to be paid to the complainant. Moreover, the State Commission has also awarded a compensation of Rs.2,00,000/-, which is also not justified because the State Commission has awarded payment of interest on the amount of refund. Interest is also in the form of compensation therefore, no separate compensation is justified.

I have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties and have examined the material on record. The State Commission has observed the following:-

"It is to be noted here that the land owners being OPs No.4 to 8 were added as a party by order No.37 dated 27-01-2015 and a joint written version was filed on their behalf as they came to contest the complaint proceeding and contended that they were the land owner and the OPs No.1 and 2 being the developers did not specify the owner's allocation for which they had to take possession of the flat in question and other flat as owner's allocation and got possession of the respective shares including the flat in question as per execution of the decree passed in CC/78/2010, filed at their instance on 24-03-2010. The materials on record clearly reveals that OPs No.1 and 2 are the developers, the OPs No.4 to 8 are the land owners and as per Development Agreement it was decided between them that the land owners would get 38% of the area of the building, the judgment of CC/78/2010 reflected that a complaint case was filed against the developer by the land owners claiming their share to the extent of 38% which was decreed. Against such judgment and decree the appeal was preferred being FA/387/2012 before this Commission but it stood dismissed on contest and the impugned judgment stood confirmed. Being aggrieved by such order of dismissal the developer preferred a revision before National Commission being Revisional Petition No.2561 of 2013 which met the same fate and against such order of the Hon'ble National Commission an SLP was filed before the Hon'ble Apex Court but that stood dismissed as withdrawn before the said Hon'ble Court resulting that the OPs no.4 to 8 go their 38% share in the building and took possession of the same including the flat in question proposed to be sold in pursuance of the agreement for sale, dated 05.10.2005. Now the fact remains, in view of the subsequent development, delivery of possession of the flat became impossible since the claim of the land owners (OPs no.4 to 8) attained finality. In the situations, as stated above, no alternative is left before this Commission but to respond to the prayer of the complainants to refund their consideration with interest as prayed for by them. Ld. Counsel appearing for the OPs no.1,2 and 3 in course of hearing submitted that his clients are intending to execute and register the deed of conveyance in favour of the complainants and they are ready to deliver possession of the same in favour of the complainants as well but we are unable to accept his submissions due to the fact that the OPs no.4 to 8/ land owners fought a legal battle against this developer and after such a long legal battle, they could acquire the right of ownership and possession of the flat. In the back ground no alternative is left before this Commission but to allow the prayer of the complainants and to direct the OPs no.1 and 2 to refund the consideration to the complainants with interest, as prayed for."

From the above, it is clear that the State Commission has not given the order of refund without any reasoning. The fact is that the litigation between the developers and the land owners has become final and the flat in question has gone to the share of the land owners and the same cannot be sold by the developers/opposite parties No.1 & 2. Hence, the only alternative was to order refund of the amount deposited by the complainants with appellants.

Coming to the question of interest, it is seen that the amount paid by the complainants has remained with the appellants for a long time and therefore, the complainants are entitled to get interest on this amount as held by the Hon'ble Supreme Court in Alok Shanker Pandey Vs. Union of India &Ors., II (2007) CPJ 3 (SC) as under:-

"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."

Coming to the question of rate of interest and compensation, it is seen that 9% p.a. is very modest and reasonable so far as the rate of interest is concerned. This Commission has recently been awarding interest from 9%p.a. to 18% p.a. depending upon the facts and circumstances of each case. Thus, the interest of 9% p.a. cannot be said to be excessive. It is true that this Commission has held the view in Gaurav Aneja & Anr. Vs. Supertech Limited, II (2018) CPJ 365 (NC) that if 18% p.a. interest is awarded then that is also in the shape of compensation and in that situation separate compensation cannot be awarded. As the State Commission has only given interest @9% p.a., a separate compensation of Rs.2,00,000/- given to the complainants to compensate the complainants for the mental agony suffered during the whole process seems justified.

From the above discussion, it is clear in the circumstances of the case that the only alternative available with the State Commission was to order refund of the deposited amount and the same has been done by the State Commission. In the facts and circumstances of the case, the interest @9% p.a. and compensation of Rs.2,00,000/- also seem justified. Accordingly, I do not find any error in the order dated 16.01.2018 passed by the State Commission. Consequently, I do not find any merit in the appeal No.372 of 2018 and the same is dismissed at the admission stage.