1. Appeal against order directing refund and interest from the date of default in delivery of possession. (Para 2 )
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2024 Supreme(SC) 1341
SUPREME COURT OF INDIA
J.K. MAHESHWARI, RAJESH BINDAL, JJ.
Soni Tyagi - Appellant
Versus
M/s. Ferrous Infrastructure Pvt. Ltd. & Anr. – Respondents
Civil Appeal No. 14795 of 2024 (Arising out of SLP (C) No. 23066 of 2023)
Decided on : 20-12-2024
Advocates:
Advocate Appeared:
For the Appellant : Mr. Shubhranshu Padhi, AOR, Mr. Jay Nirupam, Adv., Mr. D.girish Kumar, Adv., Mr. Pranav Giri, Adv., Mr. Ekansh Sisodia, Adv.
For the Respondent: Ms. Sakshi Mehley, AOR, Mr. Sajal Manchanda, Adv., Mr. Nitish Sharma, Adv.
Advocate Appeared:
For the Appellant : Mr. Shubhranshu Padhi, AOR, Mr. Jay Nirupam, Adv., Mr. D.girish Kumar, Adv., Mr. Pranav Giri, Adv., Mr. Ekansh Sisodia, Adv.
For the Respondent: Ms. Sakshi Mehley, AOR, Mr. Sajal Manchanda, Adv., Mr. Nitish Sharma, Adv.
Interest on refunds must be calculated from the date of deposit to ensure restitutionary and compensatory relief.
Headnote:(A) Consumer Protection Act, 2019 - Refund and interest - Appeal against NCDRC order directing refund with interest @ 9% from the date of default in delivery of possession - Court modifies the order to grant interest from the date of deposit, aligning with principles of restitution and compensation as established in prior judgments. (Paras 3, 5, 6)
(B) Interest - The court emphasizes that interest is payable from the date of deposit, not from the date of default, to ensure restitutionary relief. (Paras 5, 6)
Facts of the case:
The appeal arises from an NCDRC order directing a refund with interest due to default in possession delivery. The appellant contends reliance on previous judgments regarding interest calculation.
Findings of Court:
The court modifies the NCDRC's order, stating interest should be calculated from the date of deposit, ensuring restitution.
Issues: The main issue was the appropriate date from which interest on the refund should be calculated.
Ratio Decidendi: The court ruled that interest on deposits should be restitutionary and compensatory, payable from the date of deposit, not default.
Result: Appeal partly allowed.
Legal Category Hierarchy
Table of Contents
2. Dispute over whether interest on refund should be calculated from the date of deposit or the date of default in delivery of possession. (Para 3 , 4 )
3. Interest on deposited amounts is restitutionary and compensatory as developers utilize funds upon receipt. (Para 5 )
4. Interest on refund of deposits is payable from the date of deposit to ensure restitution and compensation. (Para 5 )
5. Award modified to direct interest payment from the date of deposit instead of the date of default in delivery of possession. (Para 6 )
6. From what date should interest be calculated on the refund of deposits made to a developer?
Interest is payable from the date of each deposit, as the developer utilizes the funds upon receipt, making the relief both restitutionary and compensatory. (Para 5 )
7. What is the legal nature of interest paid on the refund of deposits in developer disputes?
Such interest is considered both restitutionary and compensatory because the developer utilizes the deposited amount from the time of receipt. (Para 5 )
8. How does the principle in Experion Developers Private Limited Vs. Sushma Ashok Shiroor apply to interest on refunds?
The principle establishes that for interest to be restitutionary and compensatory, it must be paid from the dates of deposit rather than the date of default. (Para 5 )
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.
