Judgment:-

R.V. Raveendran J.

Leave granted. The respondent who appears in person, in response to the notice informing the hearing date, has requested that his presence may be dispensed with and his written submissions (reply with copies of the documents) may be treated as his arguments and matter may be disposed of. We have heard the learned counsel for appellant and considered the contentions of the respondent in his written submissions.

2. The appellant (Bhubaneshwar Development Authority) allotted MIG house bearing No. M-19, to the respondent, as per letter of allotment dated 1.5.1991. A lease-cum-sale agreement was entered between the appellant and the respondent on 6.5.1991. Clause (2) of the agreement stipulated the price of the house to be Rs.139,215/40. After deducting the payment of Rs.37,415/- made by the lessee towards the price (on 29.6.1990), it permitted the lessee to pay the balance of Rs.101,800/40 in 52 quarterly instalments of Rs.1957/70 each commencing from 1.9.1989. The said clause gave the option to the Lessee to convert the lease into a sale on completion of payment of all the instalments by paying a commitment charge of Rs.200/-. Clause (3) of the agreement required the lessee to pay an annual rent of Rs.24/90 during the period of lease commencing from 1.9.1989. Clause (6) of the agreement stipulated that in the event of default in paying any instalment or other dues on the due date, the lessee shall pay interest at the rate of 15% per annum on the defaulted instalments/dues from the date when the same fell due.

3. On execution of the Lease-cum-Sale Agreement, the respondent took possession of the house on 9.5.1991 and commenced paying the instalments from June, 1991. He paid the last 12 instalments (No.41 to 52) in a lump sum on 5.7.2001. The appellant by letter dated 1.12.2001 informed the respondent that he was still due in a sum of Rs.57,175/-. On 27.12.2001, the respondent applied to the appellant for execution and registration of a sale deed claiming that he had paid all the instalments. The appellant sent a reply dated 30.1.2002 informing the respondent that until the sum of Rs.57,175/- which was due was paid, the sale deed could not be executed. A calculation sheet showing how Rs.57,175/- was found to be due was also furnished.

4. Feeling aggrieved, the respondent approached the District Consumer Forum, Khurda alleging deficiency of service. He sought a direction to the appellant to execute the sale deed without insisting upon the payment of Rs.57,175/-. He also claimed Rs.60,000/-as compensation from the appellant. The District Forum by the order dated 27.10.2003 dismissed the complaint holding that refusal to execute a sale deed until the amount due was paid, was not a deficiency in service. The respondent filed an appeal before the State Consumer Disputes Redressal Commission, Cut tack. The State Commission by its order dated 21.12.2006 allowed the appeal in part and directed the respondent to pay a lump sum of Rs.20,000/-to the appellant in full and final settlement of the dues and directed the appellant to execute the sale deed on receipt of such amount. The appellant filed a revision before the National Consumer Disputes Redressal Commission, New Delhi, challenging the reduction in the amount payable, as arbitrary and contrary to the terms of contract. The National Commission dismissed the revision by a short order dated 8.5.2007 observing that the appellant could not charge compound interest and therefore, the order of the State Commission was just and equitable and did not call for interference. Feeling aggrieved the appellant has filed this appeal by special leave.

5. The appellant contends that it charged interest strictly in accordance with the terms of the lease agreement. It contends that charging of interest at the rate of 15% per annum on delayed instalments in terms of clause (6) of the agreement was not illegal.

6. We find considerable force in the submission of the appellant. Th