Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2018 Supreme(SC) 1901

SUPREME COURT OF INDIA
Dhananjaya Y. Chandrachud, M.R. Shah, JJ.
Dlf Homes Panchkula Pvt. Ltd. - Appellant
Versus
Himanshu Arora - Respondent
Civil Appeal No. 11097 of 2018 (Arising Out of SLP (C) No. 12603 of 2018) with Civil Appeal No. 11098-11138 of 2018 (Arising Out of SLP (C) No. 25850-25890 of 2018)
Decided On : 19-11-2018

Advocates Appeared:
K.V. Viswanathan, Sr. Advocate, Ms. Ruby Singh Ahuja, Ms. Seema S., Ms. Deepti Sarin, Mr. Nakul Gandhi, Mr. Pravin Bahadur, Mr. Sourabh Kumar, Mr. Saundarajan, Mr. Prabhat Ranjan, Mrs. Manik Karanjawala, M/S. Karanjawala & Co., AOR, Mr. Sunil Kumar Verma, AOR, Mr. Amarjeet Singh, AOR, Mr. Narender Yadav, Mr. Arjun Jain, Ms. Aasita, Mr. Waheb Hussaini, Advocates, Mr. Kabir Dixit, AOR and Mr. Vishwa Pal Singh, AOR, for the Parties; Sameer Singh, Dr. Sushil Balwada, AOR, Mr. P. N. Puri, AOR, Mr. Mukand Gupta, Mr. Abhishek Puri, Mrs. Reeta Dewan Puri, Ms. Sweta Rani, Mr. Anant Agarwal, Mr. R. Balasubramanian and Mr. Sachin Sharma, Advocates, for the Respondents; Sudhir Kathpalia, Advocate, for the Respondent-in-person

The main legal point established in the judgment is that the interest rate should be reduced to 9% per annum, and the period over which interest would be payable should be in conformity with the SCDRC's order. The appellants were entitled to credit for any compensation paid to flat buyers under Clause 15 of the agreement.

Headnote:
Interest Rate - Consumer Dispute - NCDRC - [Section 12, Consumer Protection Act, 1986] - The court reduced the rate of interest from 12% to 9% and modified the period over which interest would be payable to align with the Order of the SCDRC. The appellants were directed to pay interest at 9% per annum in conformity with the SCDRC's order, and were entitled to credit for any compensation paid to flat buyers under Clause 15 of the agreement.
Fact of the Case:

The SCDRC found the appellants in default of their obligations to flat purchasers and directed them to pay compensation. The NCDRC, on appeal, reduced the interest rate from 12% to 9% but extended the period over which interest would be payable, resulting in higher liability for the appellants.
Finding of the Court:

The court confirmed the direction of the NCDRC for the appellants to pay interest at 9% per annum, but modified the period over which interest would be payable to align with the SCDRC's order. The appellants were also entitled to credit for any compensation paid to flat buyers under Clause 15 of the agreement.
Issues: The main issue was the computation of interest payable to flat buyers and the modification of the period over which interest would be payable as ordered by the NCDRC.
Ratio Decidendi: The court held that the interest rate should be reduced to 9% per annum in line with the NCDRC's order, but the period over which interest would be payable should be in conformity with the SCDRC's order. The appellants were entitled to credit for any compensation paid to flat buyers under Clause 15 of the agreement.
Final Decision: The court directed the appellants to pay interest at 9% per annum in conformity with the SCDRC's order and allowed them to credit any compensation paid to flat buyers under Clause 15 of the agreement. The amount deposited in court was to be transferred to the SCDRC for disbursement to the flat buyers.

ORDER

1. Leave granted.

The National Consumer Disputes Redressal Commission('NCDRC') by a Judgment and Order dated 11 December, 2017 disposed of a batch of appeals arising from a decision rendered on 5 December, 2016 by the State Consumer Disputes Redressal Commission ('SCDRC'). Finding the appellants in default of their obligations to the flat purchasers, the SCDRC directed the appellants to pay compensation. The relevant part of the directions is extracted below :

"(iii) To pay compensation, by way of interest @ 12% p.a., on the deposited amount, to the complainant(s), from 07.01.2014 in respect of Complaint No.508/2016 and from the respective dates as given in Column No.5 in Table - A in respect of eight complaints indicated therein, till 30.11.2016, within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount (s) shall carry penal interest @ 15% p.a.,instead of 12% p.a., from the date of default, till realization.

(iv) To pay compensation by way of interest @ 12% p.a. on the deposited amounts, to the complainant(s) w.e.f. 01.12.2016, onwards (per month), till possession is delivered, by the 10th of the following month, failing which, the same shall also carry penal interest @ 15% p.a., instead of 12% p.a., from the date of default, till payment is made.

(v) Pay compensation, in the sum of Rs. 1,50,000/- on account of mental agony, physical harassment and deficiency in service, and Rs. 35,000/- as litigation costs, to the complainant(s), within 45 days from the date of receipt of a certified copy of the order, failing which, the said amount(s) shall carry interest @ 12% p.a., from the date of filing the complaint(s) till realization."

2. In appeal, the NCDRC reduced the rate of interest from 12 per cent to 9 per cent.

3. The grievance of the appellants is that while reducing the rate of interest, the NCDRC extended the period over which interest is liable to be paid. As a result, the liability in monetary terms under the impugned order of NCDRC is stated to be higher than under the directions of the SCDRC, despite the reduction in the rate of interest. The SCDRC, in the submission of the appellants, distinguished between those flat buyers who were seeking possession and those who were seeking a refund of monies. For those who were seeking possession, interest was made payable by the SCDRC from the anticipated date of possession, whereas the NCDRC, according to the appellants, has obliterated the distinction between those who sought possession and those who were seeking refund of their monies.

4. On 18th May, 2018, the following Order was passed by this Court :

"Delay condoned.

Heard the learned Senior counsel appearing for the petitioners.

Issue notice and stay of further proceedings, subject to the petitioners deposit the amount determined by the order of the State Commission within a period of four weeks from today."

5. In pursuance of this Order, a deposit was made of an amount of Rs. 5,00,51,784/-(Rupees Five Crores Fifty One Thousand Seven Hundred Eighty Four) which has been recorded in the Order dated 18th June, 2018, which reads as follows :

"Let the amount of Rs. 5,00,51,784/- (Rupees Five Crores Fifty One Thousand Seven Hundred Eighty Four), deposited by the petitioners on 14.06.2018, be deposited in an interest bearing Fixed Deposit in a nationalised Bank, initially for a period of six months, to be renewed from time to time."

6. Mr. Vishwanathan, learned Senior Counsel has placed a chart on the record. The chart indicates the amount which according to the appellants would have been payable in terms of Clause 15 of the Agreement between the parties, where compensation is liable to be computed at Rs. 10 per sq. ft. of the saleable area for a delay beyond 24 months or such extended periods as permitted under the Agreement. The Chart also indicates the amount which was liable to be paid in terms of the Order of the SCDRC (at 12 per cent after 3 years from the Agreement da

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