Interest on refunds must be calculated from the date of deposit to ensure restitutionary and compensatory relief.

ORDER :

1. Leave granted.

2. Against the order of National Consumer Disputes Redressal Commission (in short, “NCDRC”) dated 3rd February, 2023 directing refund along with interest @ 9% from the date of default in delivery of possession, the present appeal has been filed.

3. Learned counsel of appellant has placed reliance on a three Judge Bench decision in Experion Developers Private Limited Vs. Sushma Ashok Shiroor [(2022) 15 SCC 286] and also the judgment in DLF Homes Panchkula Private Limited Vs D.S. Dhanda & Ors. [(2020) 16 SCC 318].

4. Per contra, learned counsel for the respondent submits that the judgment in the case of DLF Homes Panchkula Private Limited (supra) is based on the consent given by the parties. Therefore, the said judgment may not be treated as a precedent in the facts of this case.

5. After hearing, in our view, the judgment of Sushma Ashok Shiroor (supra) decides the principle on which the interest ought to be paid by the developer. The analogy drawn was that the interest may be payable on the amount deposited because such relief is restitutionary and also compensatory. In our view, the amount as and when deposited with the developer has been utilised by him. Therefore, on its utilisation, the interest is payable from the date of deposit and not from the date of default in delivery of possession. In this respect, reference can be made to paragraph 32 of the said judgment, which is reproduced below:

“32. We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda [DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda, (2020) 16 SCC 318] and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the appeal filed by purchaser deserves to be partly allowed. The interests shall be payable from the dates of such deposits.”

6. In light of the said judgment and as per the discussion, we modify the award passed by the NCDRC and direct that the interest on the amount be paid from the date of deposit instead of the date of default in delivery of possession at the same rate. Accordingly, with the above modification in the impugned judgment, the appeal stands disposed of.

7. Pending applications, if any, stand disposed of.