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Judgment
These appeals have been filed by the appellants against the order dated 20.9.2010 of the State Consumer Disputes Redressal Commission, Maharashtra, (in short 'the State Commission") passed in complaint case Nos.345 of 2000, 346 of 2000, 347 of 2000, 227 of 2001, 228 of 2001, 229 of 2001.
Brief facts of these cases are similar that the appellants filed a complaints against the respondents/opposite parties for refund of the deposited amounts along with 18% p.a. interest. Details of the amount paid by each of the complainants is as follows:
Sr. No.
Name of Complainant
Case No.
Amount
1.
Mr. M.M.Sarang
C/345/2000
Rs.1,75,000/-
2.
Mrs. Rohini Mether
C/346/2000
Rs.2,00,000/-
3.
Mrs. Deepa R. Malandkar
C/347/2000
Rs.1,60,000/-
4.
Mr. P.Y.Sahastrabudhe
C/227/2001
Rs.2,70,000/-
5.
Mrs. M.M.Pati
C/227/2001
Rs.2,15,000/-
6.
Sagar Terrace Co-p. Society
C/227/2001
Rs.8,08,000/-
7.
Mr.S.S.Baing
C/228/2001
Rs.1,10,000/-
8.
Mr. T.S.Shikalgar
C/228/2001
Rs.2,70,000/-
9.
Mr. C.V.Shetty
C/228/2001
Rs.74,000/-
10.
Mr. P.R.Phal
C/228/2001
Rs.1,57,000/-
11.
Mr. B.K.Darad
C/228/2001
Rs.1,90,000/-
12.
Mr.M.B.Rege
C/228/2001
Rs.1,10,000/-
13.
Mr. P.D.Modak
C/229/2001
Rs.1,27,000/-
14.
Mr. V.S. Sawarkar
C/229/2001
Rs.2,45,000/-
15.
Mr. V.S.Kamat
C/229/2001
Rs.1,90,000/-
16.
Mr.D.V.Shirolkar
C/229/2001
Rs.1,99,000/-
17.
Mr. K.K.Patankar
C/229/2001
Rs.1,10,000/-
Total----Rs.34,10,000/-
The State Commission decided the complaints and ordered the refund of the principal amounts. The appellant filed review application before the State Commission, which was allowed vide order dated 05.03.2011 passed by the State Commission. The respondents/opposite parties preferred an appeal before this Commission on the ground that the State Commission did not have power to review its own order. This Commission vide its order dated 29.04.2014 set aside order dated 05.03.2011 of the State Commission with the liberty to complainants to file appeal against the main order dated 20.9.2010 passed by the State Commission in the complaint case.
Accordingly, these appeals have been filed.
Respondent Nos.1 & 2 were granted last opportunity on 28.5.2018 to argue the matter on the next date i.e. 23.10.2018. However, none was present on behalf of the respondent Nos.1 & 2 to argue the matter. The respondent No.3 was already proceeded ex-parte vide order dated 28.5.2018 passed by this Commission. Accordingly, the learned counsel for the appellants was heard.
Learned counsel for the appellants stated that though State Commission has clearly mentioned in the body of the judgment dated 20.9.2010 that the complainants are entitled to interest @18 p.a. as per the agreed terms and conditions of the agreement, the State Commission inadvertently missed out this aspect in the operative portion of the order and only refund of the principal amount has been ordered. The learned counsel indicated towards the following finding of the State Commission in respect of the interest:
"18. Next question which requires consideration as to whether the complainants are entitled for an interest @ 18% p.a. as claimed. What we find that the amounts have been taken by opponent No.1 and they have been used by him in his business and possession even though the opponent No.1 could not develop the property in question and, therefore, to the extent of the principal amount which has been paid by the complainants, complainants are entitled to claim interest @18% p.a.
We are aware that bank rates presently are lesser than this amount. However, we are equally aware that the interest rate in the private market of builder is much higher than 18% p.a. In one of the cases which we have come across wherein builder has agreed to pay interest of Rs.1,75,000/- within a period of 12 months as against advancement of Rs.1,75,000/- by an investor. Therefore, that will show the rate of interest in the building profession as against bank rate of 18% p.a. is higher interest and, therefore, what we find that 18% interest though appears to be higher than bank interest we are taking into consideration the private market of investment and interest in the building profession and we find that 18% interest is proper one in the facts of this case and, therefore, we hold that complainants are entitled to claim interest @18% p.a. on the amounts advanced."
The learned counsel argued that from the above finding of the State Commission, it is very clear that the State Commission has agreed to allow interest @18% p.a. on the principal amount as demanded by the complainants. However, in the final operative portion of the order in CC No.345 of 2000 only the following is mentioned:-
""ORDER
Complaint no.345/2000
Complaint is partially allowed.
Opponent no.1 shall pay Rs.1,75,000/- to the complainant from 15/12/1998 till its realization.
Prayer in respect of damages of Rs.5 lakhs is hereby rejected.
Opponent no.1 shall pay Rs.5000/- to the complainant by way of cost of complaint.
Complaint is dismissed as against opponent nos.2 & 3.
Copies of the order be furnished to the parties."
Learned counsel mentioned that similar orders were passed in other complaints. He argued that there seems to be an inadvertent error on the part of the State Commission by not mentioning any order regarding interest in the operative portion of the order though, it seems that the State Commission intended to award interest @18% p.a. from the date 15.12.1998 till realisation. The State Commission finally realised its mistake and on filing the review application, the State Commission vide its order dated 05.03.2011 allowed the review application and amended the operative portion of the order as under:-
"These sentences in the operative part shall be substituted by the following sentences:
Opponent No.1 shall pay Rs.1,75,000/- to the complainant with interest @ 18% from 15.12.1998 till its realization.
Accordingly, order be corrected by the office of State Commission."
It was argued by the learned counsel that though the counsel for opposite party No.1 had agreed for the amendment in respect of the payment of interest @18% p.a. as observed by the State Commission in its order dated 05.03.2011, the opposite party No.1 preferred an appeal before the National Commission on the ground that the State Commission did not have any power to review its own order. The National Commission vide its order dated 29.04.2014 set aside the order dated 05.03.2011 of the State Commission, but allowed liberty to the complainants to file appeal against the order dated 20.9.2010 in which the interest was not allowed. Learned counsel argued that clearly the State Commission had allowed the payment of interest @18% p.a. on the principal amount, but the same was inadvertently left out in the operative portion of the order. The State Commission corrected its mistake by passing order dated 05.03.2011 on the review application of the complainants. Though the National Commission set aside the order dated 05.03.2011, it gave liberty to file the appeal against the order dated 20.9.2010 of the State Commission. Thus, this appeal is only a formality to allow the interest @ 18% p.a. which the State Commission intended to allow.
Learned counsel stated that in the Supplemental Memorandum of Understanding entered between the parties, the following provision is already there, which entitles the complainants to receive interest @18% p.a. on the deposited amount:-
"5. The party of the First Part represented that the position of the party is reserved for recreation garden under Development Plan. The party of the First part agree and undertake to apply for removal of the said reservation to the competent Authority and get the same removed at their own cost within a period of two months from the date hereof the party of the Second Part at their own cost within a period of two months from the date hereof the party of the Second Part at their option terminate their agreement or accept the flats which the party of the First Part is able to construct by utilising F.S.I. available on existing property and refund the proportionate amount in the event of termination the party of the First Part is liable to refund the entire amount paid under this agreement with interest thereon at the rate of 18% per annum from the date of payment."
On the basis of the above arguments, the learned counsel prayed that these appeals may be allowed and interest @18% p.a. on the principal amount be ordered for payment. Learned counsel mentioned that the opposite parties have not even paid the principal amount as ordered by the State Commission.
I have carefully considered the arguments advanced by the learned counsel for the appellants and have examined the record. First of all, Registry of this Commission has reported that there is a delay of 1379 days in filing the present appeals. As this Commission vide its order dated 29.4.2014 passed in FA Nos.202-207 of 2011 filed by the opposite parties against the order dated 05.03.2011 of the State Commission, has granted liberty to the complainants to file appeals against the main order dated 20.9.2010 of the State Commission and the present appeals have been filed in pursuance of the order of this Commission, the delay is condoned. Clearly, the State Commission has given a finding that the complainants are entitled to get interest @18% p.a. on the amount of refund. However, the same was inadvertently left out in the operative portion of the order dated 20.9.2010 passed by the State Commission. The fact that the State Commission passed the order dated 05.03.2011 amending operative portion of the order dated 20.9.2010 clearly confirms the intention of the State Commission to award interest @18% p.a. on the amount of refund.
From the Supplemental Memorandum of Understanding executed in 15.12.1998, it is seen that this MOU has been entered between opposite party No.1 and opposite party No.3 and not directly by the complainants with the opposite party No.1. Therefore, this MOU cannot be treated as binding on opposite party No.1 qua the complainants. Moreover, promise of 18% p.a. interest is conditional and it is not clear whether the conditions are met for making opposite party No.1 make for this rate of interest. It is also seen that the State Commission has also not relied on this supplemental MOU for ordering interest @18% p.a. interest. The State Commission has justified interest @18% p.a. on the basis of interest rate prevailing in the real estate market. In these circumstances, I do not find this MOU as a basis for ordering 18% p.a. interest on the amount of refund. Keeping in view the interest rate scenario prevailing during the period under question, I deem it appropriate to allow interest @12% p.a. from 15.12.1998 till the refund of the principal paid amounts by the complainants.
From the above discussion, I am of the view that the appellants/complainants are entitled to payment of interest @12% p.a. on the amount of refund in the facts and circumstances of these cases. Accordingly, the opposite party No.1 shall pay interest @12% p.a. on the amounts of refund from the date of respective deposits till actual payment of the principal amount in each case. The respondent/opposite party No.1 shall also pay additional cost of litigation as Rs.5,000/- (rupees five thousand only) to each complainant.