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SUPREME COURT OF INDIA
M.R. Shah, S. Ravindra Bhat, JJ.
K. L. Suneja & Anr. – Appellants
Versus
Dr. (Mrs.) Manjeet Kaur Monga (D) Through Her Lr & Anr. – Respondents
Civil Appeal No(s). 1401 of 2019 With Civil Appeal No(S). 4530 of 2019
Decided On : 31-01-2023
Civil Procedure Code, 1908 – Order XXI Rule 4 – Cancellation of allotment of flat – Interest on refund amount – Complainant did not state anywhere, before MRTP Commission, that original Pay Order was attached with pleadings – It was necessary for her to apply through counsel for an appropriate order to ensure that amount was deposited in an interest-bearing account – That step was not taken – Tribunal appears to have been completely swayed by complainant's plight – Provisions of Order XXI are applicable to decrees of civil court – However, they embody a sound policy principle, that if amount is deposited, or paid to decree holder or person entitled to it, person entitled to amount cannot later seek interest on it – This is a rule of prudence – Complainant was aware that Pay Order had been tendered by developer to her; nevertheless she filed original Pay Order with her complaint and did not seek any order from MRTP Commission at the relevant time – Complainant cannot claim interest from developer, who had returned Pay Order – No equities can be extended to her aid – Impugned order set aside – Developer’s appeal allowed and complainant’s appeal dismissed. (Paras 26, 28, 31, 32, 33 and 36)
Facts of the case:
There are two appeals preferred against a common order of the National Company Law Appellate Tribunal. The first, by the original home buyer’s legal representative (hereinafter, “complainant”) and the second by the builder / developer.
Findings of Court:
All courts and judicial forums should frame guidelines in cases where amounts are deposited with the office / registry of the court / tribunal, that such amounts should mandatorily be deposited in a bank or some financial institution, to ensure that no loss is caused in the future. Such guidelines should also cover situations where the concerned litigant merely files the instrument (Pay Order, Demand Draft, Banker’s Cheque, etc.) without seeking any order, so as to avoid situations like the present case. These guidelines should be embodied in the form of appropriate rules, or regulations of each court, tribunal, commission, authority, agency, etc. exercising adjudicatory power.
Result : Appeals Partly allowed.
JUDGMENT :
S. RAVINDRA BHAT, J.
1. There are two appeals preferred against a common order of the National Company Law Appellate Tribunal (hereinafter, “NCLAT”/“Tribunal”). The first, by the original home buyer’s legal representative (hereinafter, “complainant”) and the second by the builder/developer (hereinafter, “developer”).
2. In 1989, one Smt. Gursharan Kaur had applied for a flat in a proposed group housing scheme called ‘Siddharth Shila Apartments’, situated at Plot No. 24 in Vaishali Scheme, Ghaziabad, U.P. (hereinafter, “Scheme”). After depositing three instalments towards the flat, she passed away, and was succeeded by her daughter-in-law Dr (Mrs.) Manjeet Kaur Monga, who deposited the fourth instalment. Thereafter, the developer issued an allotment letter dated 21.05.1992, earmarking Flat No. D-301 (3rd floor) with a super built-up area of 1375 sq. ft. in the Scheme. Dr Manjeet Kaur Monga deposited two further instalments, with the sixth instalment deposited in September 1993. Eight years later, i.e., in December 2001, a demand notice for payment of the eighth and ninth instalments was issued to the complainant. She resisted this notice, as there was no intimation about the progress of work and delivery of possession of flat to her. The developer however, issued a letter thereafter, cancelling the allotment of the complainant’s flat on 30th April 2005. The complainant had deposited seven instalments up to 4th October 1993 totalling Rs. 4,53,750/-. With the cancellation letter, the developer enclosed a Pay Order dated 30th April 2005 for Rs. 4,53,750/- issued by Citibank towards full refund of payments made by the complainant towards the flat.
3. Aggrieved, the complainant through her lawyer, issued a notice dated 7th September 2005 to the developer, stating that she was always ready and willing to pay the instalments towards the flat, in tune with the allotment letter, but the developer did not keep up its part of the bargain regarding timeliness of delivery of possession and quality of construction. The notice alleged that even 40% of the construction work had not been completed till the seventh instalment, though the complainant had paid a cumulative of Rs. 4,53,750/-. She demanded possession of the flat besides claiming Rs. 25,00,000/- as compensation. With the notice, the complainant returned the Pay Order of Rs. 4,53,750/-. She also sent a cheque of Rs.1,00,000/- expressing willingness to pay the price of the flat. The developer replied to the notice on 26th September 2005 denying the allegations of delay in construction and accused the complainant of default in payment of instalments. However, the developer did concede to slight delay in completion of the project due to litigation with the Ghaziabad Development Authority.
4. Dr. Manjeet Kaur Monga filed a complaint under Section 36 of the (then) Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter, “MRTP Act”) alleging unfair trade practice by the developer. The complaint claimed physical possession of the flat or an alternative flat of the same size and dimension. The complainant also applied under Section 12A of the MRTP Act seeking to restrain the developer from alienating flat D-301 in Siddharth Shila Apartments; she also filed C.A. No. 39/2009 for award of compensation of Rs. 25,00,000/- under Section 12B of MRTP Act alleging to be a victim of unfair trade practice at the hands of the developer. The MRTP Commission disposed off the application filed under Section 12A of the MRTP Act restraining the developer from creating third party interest with respect to the flat. The developer also resisted the complaint and claimed that the complainant was disentitled to any relief under the MRTP Act. It was further alleged that the complainant had failed to deposit payments in accordance with the plan in the allotment letter and that she had, in terms of her letter dated 22nd May 2002, shown disinclination to take possession of the flat by alleging breach o
Provisions of Order XXI of CPC are applicable to decrees of civil court – They embody a sound policy principle that if amount is deposited or paid to decree holder or person entitled to it, person en....
(1) Justified Withholding of Payments – An allottee is not necessarily “at fault” for stopping installments if it is evident that the builder is nowhere near completing the project by the committed d....
Flat Buyer’s Agreement – Denial of timely possession despite substantial payment – Payment of interest on refund of principal amount is necessary.
Compensation has to be paid in terms of agreement between parties.
Compensation - Since the compensation in the form of interest has already been awarded, the Respondents/Complainants shall not be entitled for any other compensation.
Allotment – Once an allotment letter is made its conditions prevail over the conditions mentioned in the earlier LoI.
Interest is payable only on the principal sum and not on the interest part of the award, unless specifically provided by statute or contract.
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