The main legal point established in the judgment is the interpretation of the contract between the parties regarding the payment of interest on the unadjusted amount deposited under the accelerated release of power connection scheme.

ORDER

1. THIS APPEAL IS FILED AGAINST THE ORDER OF THE NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION DATED 3-4-2001.

2. BRIEFLY STATED, THE FACTS ARE AS FOLLOWS:

THE APPELLANTS HAD FLOATED A SCHEME KNOWN AS ACCELERATED RELEASE OF POWER CONNECTION (ARPC). UNDER THE SCHEME INSTEAD OF DEPOSITING AT THE NORMAL RATE OF RS 400 PER KW, A CONSUMER COULD DEPOSIT AT THE RATE OF RS 750 PER KW. ON THAT AMOUNT SIMPLE INTEREST @ 7% P.A. WAS TO BE PAID. THE SCHEME PROVIDED THAT AFTER A PERIOD OF FIVE YEARS, FROM THE DATE OF DEPOSIT, THE AMOUNT DEPOSITED ALONG WITH INTEREST THEREON WOULD BE ADJUSTED AGAINST DUES OF FUTURE BILLS. IF THERE WAS A DISCONNECTION THEN THE DEPOSITED AMOUNT AND INTEREST WERE TO BE REFUNDED.

3. PURSUANT TO THE SAID SCHEME, THE RESPONDENT DEPOSITED RS 7,50,000 ON 24-3-1987. THE FIVE YEARS EXPIRED ON 24-3-1992. IT SEEMS THAT THE AMOUNT OF RS 7,50,000 WAS ONLY ADJUSTED BY THE APPELLANTS ON 2-4-1993. THE INTEREST AMOUNT THEREON WAS ADJUSTED ON 18-6-1993.

4. THE RESPONDENT FILED A COMPLAINT BEFORE THE DISTRICT CONSUMER FORUM CLAIMING THAT FOR THE PERIOD, AFTER THE END OF FIVE YEARS, DURING WHICH THE AMOUNT HAD NOT BEEN ADJUSTED, HE WAS ENTITLED TO INTEREST @ 22%. HE ALSO CLAIMED INTEREST ON INTEREST. THE DISTRICT CONSUMER FORUM ALLOWED THE CLAIM BY GRANTING INTEREST @ 18% NOT JUST ON THE PRINCIPAL SUM OF RS 7,50,000 BUT ALSO ON THE INTEREST AMOUNT OF RS 2,62,500. THE APPEAL FILED BEFORE THE STATE CONSUMER FORUM WAS DISMISSED. THE REVISION BEFORE THE NATIONAL CONSUMER FORUM HAS ALSO BEEN DISMISSED BY THE IMPUGNED ORDER.

5. IN OUR VIEW, SO LONG AS THE AMOUNT REMAINED UNADJUSTED THE APPELLANTS WERE BOUND TO CONTINUE TO PAY INTEREST. HOWEVER, THE CONTRACT BETWEEN THE PARTIES PROVIDES THAT SIMPLE INTEREST WILL BE PAID @ 7%. THEREFORE, ALL THAT THE APPELLANTS BECOME LIABLE TO PAY IS SIMPLE INTEREST @ 7% FROM 24-3-1992 TILL THE DATE WHEN THE PRINCIPAL SUM WAS ADJUSTED ON 2-4-1993. THERE CAN BE NO QUESTION OF PAYMENT OF INTEREST ON INTEREST.

6. THUS, WE SET ASIDE THE ORDERS AND DIRECTIONS OF THE CONSUMER FORUMS AND DIRECT THAT THE APPELLANTS SHALL PAY SIMPLE INTEREST @ 7% FROM 24-3-1992 TILL THE DATE OF ADJUSTMENT I.E. 2-4-1993.

7. THE APPEAL STANDS DISPOSED OF ACCORDINGLY. NO ORDER AS TO COSTS.