The court clarified that interest on the refund amount is considered as compensation under Section 14(1)(d) of the Consumer Protection Act.

Mr. Justice A.L. Bahri, President—This appeal is by PUDA challenging order of District Forum, Ludhiana dated April 30, 1997 granting compensation of Rs. 5,000/- and interest @ 18% per annum on the amount of Rs. 17,000/- to Subash Chander the complainant.

2. In 1985 Subash Chander applied for LIG house on deposit of Rs. 1,000/-. On September 30, 1990 one house was allotted to him and he was required to make payment of the balance amount of Rs. 15,797/-. The amount was not deposited within time; extension was sought, which was granted. The amount was paid subsequently. However, the complainant did not take possession of the house as there were some faults; certain amenities were not provided by the PUDA. The complainant thus applied for refund of the amount alongwith interest @ 24% per annum on November 20, 1992. A reminder was also issued. Subsequently, District Forum was approached. The PUDA took up the plea that there was no deficiency in rendering service on their part and the amount could be refunded but with interest @ 10%. The plea did not appeal to the District Forum that the impugned order was passed.

3. In appeal Mr. C.M. Makkar, Advocate for the PUDA has argued that the double compensation — one by way of interest on the amount and another sum of Rs. 5,000/- in addition could not be allowed towards compensation. There is force in this contention. The grant of interest in such like matter is by way of compensation as required under Section 14(1)(d) of the Consumer Protection Act. Since there is no dispute that the amount was required to be refunded, interest by way of compensation only was to be paid. We consider 18% per annum interest to be reasonable compensation. That being the position, there was no need of separately allowing Rs. 5,000/- towards compensation. We partly accept the appeal and modify the order of the District Forum directing the PUDA to refund the amount of Rs. 17,000/-, if not already refunded alongwith 18% per annum interest thereon with effect from November 20, 1992 till payment. If the amount of Rs. 17,000/- has already been paid, the interest on the aforesaid amount for the period commencing from November 20, 1992 till payment will be paid. There will be no order as to costs. The appeal stands disposed of as above.

Appeal partly allowed.

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