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2023 Supreme(SC) 374

SUPREME COURT OF INDIA
DINESH MAHESHWARI, SANJAY KUMAR, JJ.
M/s Suneja Towers Private Limited & Anr. – Appellants
Versus
Anita Merchant - Respondents
Civil Appeal Nos. 2892-2894 of 2023 (Arising Out Of SLP (Civil) Nos. 8163-8165 OF 2022)
Decided on : 18-04-2023

Advocates appeared:
For the Petitioner(s): Mr. Ajay Bhargava, Adv. Mrs. Vanita Bhargava, Adv. Mr. Arvind Ray, Adv. Mr. Karan Gupta, Adv. Ms. Vansha S Suneja, Adv. M/S. Khaitan & Co., AOR
For the Respondent(s): Mr. Viksit Arora, Adv. Ms. Supriya Juneja, AOR

Headnote:(A) Consumer Protection Act, 1986 - Section 2(d) - Claim for compensation for failure to deliver possession of flats - Appellants failed to hand over possession despite receiving 60% of payment; District Forum dismissed complaints stating respondent did not fall under consumer category, while State Commission upheld maintainability - Compound interest at 14% awarded by State Commission based on the ruling in Dr. Manjeet Kaur Monga v. K.L. Suneja, emphasizing consumer rights and compensation for suffering - National Commission agreed with State Commission's findings. (Paras 2.1, 6, 30, 32)

(B) General principles of awarding interest - Courts emphasized that Consumer Fora may award compensation for loss or injury sustained by the consumer but compound interest does not have universal applicability; relied on principles of restitution and equity - Grant of compound interest without firm basis is disapproved. (Paras 22, 27.1)

(C) Nature of Claim - Award of compound interest deemed inappropriate unless specifically justified; prior payments by consumer and attempted refunds taken into account, limiting further interest accruals post-refund attempts. (Paras 26, 27.2)

Findings of Court:
The court found a lack of justification for awarding compound interest based on previous rulings and circumstances of the case - Respondent allowed to retain sums received under the orders of the National Commission.

Issues: Whether compound interest could be awarded under the Consumer Protection Act; evaluation of consumer status; appropriateness of interest rates in real estate matters.

Ratio Decidendi: Court ruled that Consumer Fora must evaluate all relevant factors before awarding interest, and mere reliance on precedent without COVID-19 considerations leads to unjust outcomes - Decisions by lower fora can be disapproved where foundational analysis is lacking.

Result: Appeals allowed, impugned orders reversed.

Table of Content
1. complaint's maintainability and factual background. (Para 2)
2. rival arguments regarding interest and compensation. (Para 6 , 8 , 9)
3. court's observations on compound interest and related judgments. (Para 12 , 13 , 19 , 22)
4. analysis of decision in dr. monga's case and its implications. (Para 16 , 21)
5. conclusion allowing respondent to retain previously received payments. (Para 28)

JUDGMENT :

DINESH MAHESHWARI, J.

Table of Contents

Preliminary and brief outline

Relevant factual and background aspects

The State Commission awarding compound interest

Approval by the National Commission

Rival Contentions

Matters of form and pleading not relevant in the present case

The cited decisions on award of interest in real estate dealings.

The decision in Manjeet Kaur Monga’s Case and its connotations

The complexities of present matter requiring further exploration In extraordinary measure, money received by respondent allowed to be retained Conclusion

Preliminary and brief outline

Leave granted.

2. In these appeals by special leave, the appellants have essentially questioned a part of the common judgment and order dated 31.03.2022, as passed by the National Consumer Disputes Redressal Commission, New Delhi1[Hereinafter also referred to as ‘the National Commission’.] in Revision Petition Nos. 771 of 2020, 772 of 2020 and 773 of 2020, whereby the National Commission has declined to interfere in the common judgment and order dated 12.03.2020, as passed by the State Consumer Disputes Redressal Commission, Delhi2[Hereinafter also referred to as ‘the State Commission’.], in Appeal Nos. 121 of 2014, 122 of 2014 and 123 of 2014.

2.1. The present set of appeals has its genesis in the three complaints filed by the complainant-respondent before the Consumer Disputes Redressal Forum-II, New Delhi3[Hereinafter also referred to as ‘the District Forum’.], bearing Nos. C-252 of 2006, C-283 of 2006 and C-284 of 2006 alleging deficiency of service on the part of the present appellants for having failed to deliver the possession of three flats booked by her, even after expiry of the agreed period and despite the fact that she had admittedly made payment of 60% of the total sale consideration. The District Forum, in its order dated 20.12.2013, dismissed the complaints so filed by the present respondent on various grounds including that she had tried to avail of the services of the builder for commercial purposes by booking three flats and thus, did not fall within the category of “consumer”, as defined under Section 2 (d) of the Consumer Protection Act, 19864[Hereinafter also referred to as ‘the Act of 1986’].

2.2. In the said judgment and order dated 12.03.2020, the State Commission, however, disapproved the order so passed by the District Forum as regards the maintainability of complaints and then, particularly with reference to the decision in the case of Dr. Manjeet Kaur Monga v. K.L. Suneja: (2018) 14 SCC 6795[Reference to this case has occurred at multiple places hereafter; where it has been referred to as the case of ‘Dr. Manjeet Kaur Monga’ or the case of ‘Dr. Monga’.], wherein the award of compound interest by Competition Appellate Tribunal6[‘COMPAT’, for short.] under the Monopolies and Restrictive Trade Practices Act, 19697[Hereinafter also referred to as the ‘MRTP Act’.] was not interfered with by this Court, granted relief to the complainant in the manner that the appellants shall refund the amount deposited by her together with ‘compound interest at the rate of 14% from the date of deposit’. The National Commission rejected all the contentions urged on behalf of the appellant against the order so passed by the State Commission and also found no reason to interfere with th

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