IMPORTANT POINTS
(1) No Double Compensation for One Mistake: Under the Consumer Protection Act, if a builder fails to deliver a property, the interest awarded on the buyer’s refund is the compensation for the loss of use of their money. A court cannot award an additional lump-sum compensation on top of this interest for the exact same mistake.
(2) Interest Must Start from the Date of Deposit: To truly compensate a buyer, the interest calculated on a refund must start from the exact dates the buyer handed the money over to the builder, rather than calculating from the date of the very last deposit.

ORDER

Heard learned counsels for both the parties in detail. The matter pertains to the payment of Rs.5,46,400/- as against total consideration of Rs.11,54,750/- with respect to the unit booked by the complainant. The main contention of the Complainant that the Opposite Party never had the sanction of the Competent Authority to construct the 6th & 7th floor and the Complainant was allotted a unit in the 7th floor and the advances and further payment in consideration accepted. In the absence of the Opposite Party handing over the possession, the complaint filed CC/148/2014 before the learned District Commission, which was disposed of vide order dated 28.11.2016 directed as follows:-

“ORDER

The complaint is partly allowed. Opposite parties Nos.1, 2 and 3 are directed to allot and transfer a property equivalent to ‘B’ Schedule Apartment with car park and proportionate undivided right in the ‘A’ Schedule Property and common areas and facilities in favour of the complainant in Cottage Apartment situated in ‘A’ Schedule property for the price already fixed under agreement Ex.C8.

Opposite party No.3 shall also pay sum of Rs.50,000/- (Rupees Fifty thousand only) as compensation and cost of the litigation expenses of the case is Rs.10,000/- (Rupees Ten thousand only). Hence within 60 days time from the date of receipt of copy of this order.”

2. As against which both the parties appeared before State Commission and the learned State Commission vide order dated 08.09.2026 directed as follows:-

“Order

a) Appeal Nos. 3358/2016 and 1141/2017 are allowed in part;

b) Order of the District Commission stands modified.

c) OP3 is directed to pay Rs.5,46,500/- with interest at 18% p.a. from date of receipt of payment till the date of deposit to the Complainant.

d) OP3 is directed to pay Rs.10 lakhs as compensation to the Complainant.

OPS is directed to pay Rs.1 lakh as litigation cost to the Complainant.

f) OP3 shall comply the order within 8 weeks from the date of receipt of this order.

g) Amount in deposit in Appeal No.3358/2016 shall be transmitted to the District Commission for disbursement to the Complainant.

h) Send a copy of this Order to the District Commission and supply free copy to the parties concerned, immediately.

i) Keep the original of this Order in Appeal No.3358/2016 and copy thereof in Appeal No.1141/2017.”

3. It is the contention of OP-1 that the relief granted by the State Commission in the form of refund with interest @ 18% is excessive and, further, the grants of another Rs.10 lakhs compensation is not tenable in law. Rs.1 lakh as litigation costs is also excessive.

4. On the other hand, the learned counsel for the Complainant/ Respondent states that this unit was booked over 20 years ago and while cost disproportionately increased, the complainant was left prejudiced. He sought the Complainant put to terms. He also states that while he was offered refund in May, 2011 it was without any compensation.

5. Heard the learned counsels for both the parties in detail and carefully perused the records.

6. The Hon’ble Supreme Court in a recent case of Rajnish Sharma v. M/s. Business Park Town Planners Ltd., 2025 LiveLaw (SC) 951, decided on 24.09.2025, held that where a builder has levied an exorbitant rate of interest upon a consumer for delayed payment, principles of equity and fairness mandate that the same standard be applied against the builder for its own default in handing over possession. The Court clarified that there is no rigid principle of law that the rate of interest charged by the builder must always be granted to the buyer, as the reasonableness of interest varies from case to case and depends upon the facts and circumstances involved. Relevant paras of the said judgement are reproduced as under:

“4.7 Thus, the conduct of the respondent has been full of blemishes throughout.

4.8 Finally, the respondent charged the appellant interest @ 18% p.a. whereas agreed to give back to the appellant the principa