Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
AVM J. Rajendra, AVSM VSM (Retd.), Presiding Member and Anoop Kumar Mendiratta, Member
Anuj Biswas and Anr. —Complainants
Versus
Kapstone Constructions Pvt. Ltd. and Ors. —Opp. Parties
NC/EA/223/2025 (Execution) in NC/CC/2760/2018
Decided on 29.5.2026

Advocates:
Counsel for the Parties:
For the Decree Holders:Mr. Anuj Biswas, DH-1 in person Mr. Ashutosh Dubey, Advocate for DH-2
For the Judgment Debtors:Ms. Diya Kapur, Sr. Advocate (VC), Mr. Aman Raj Gandhi, Advocate and Mr. Parthasarathy Bose, Advocate and Ms. Lavina Bhargava, Advocate for JD1

IMPORTANT POINT
The Rule of Appropriation – When a builder (or any debtor) deposits a partial payment that falls short of the total amount owed, the money cannot be deducted from the main principal right away. Legally, the payment must first be used to clear the outstanding interest, then the legal costs, and only whatever is left over is subtracted from the principal amount. Interest is then calculated only on the remaining unpaid principal.

Headnote:
The Consumer Protection Act – Execution of Decree – Refund of Deposited Amount – Rule of Appropriation – Doctrine of Merger – Default Interest Penalty – Statutory Dues / Tax Refunds – Complainants (Decree Holders or DHs) secured a favorable order in 2022 directing the Builder (Judgment Debtor or JD) to refund their deposited money with 9% annual interest within six weeks, failing which a default interest rate of 12% would apply – Builder appealed to the Supreme Court, but the appeal was dismissed in 2025, making the 2022 order final – Builder made payments in tranches but missed the initial six-week deadline, triggering the 12% default interest rate for the delayed period – Complainants filed an execution application claiming a shortfall of roughly Rs. 20 Lakhs, arguing the 12% interest should apply to the entire period – Builder argued the debt was fully paid and claimed they actually overpaid by mistakenly refunding non-refundable statutory taxes (VAT, Service Tax, Stamp Duty) with interest – Commission conducted a detailed mathematical reconciliation and determined that the Builder’s payments fully satisfied the decretal dues – In fact, the calculations revealed that the Builder had made an excess payment of Rs. 15,04,592.85 to the Complainants – Despite the excess payment (which the Builder attributed to mistakenly refunding taxes), the Commission declined to pass an order forcing the Complainants to return the tax amounts, stating that the parties were free to pursue separate legal remedies for that specific dispute – The Execution Application was disposed of as the decree stood satisfied.

ORDER

Heard the learned counsel for the parties.

2. The learned Counsel for DHs contended that there is balance outstanding from the JDs to be paid to the DHs, as per the order dated 13.04.2022 passed in C.C. No.2760 of 2018. On the other hand, the learned Counsel for JD contended that the entire decretal amount as well as certain excess has been paid to the DHs and the DHs are bound to refund the excess amount paid by OP, since excess payment has been made.

3. Vide order dated 10.02.2026, this Commission, in the present execution proceedings, passed the following order:

“1. Heard learned counsel for both the parties in detail including Sri Anuj Biswas (Decree Holder No.1 in person). It is a matter of record that this Commission in CC No.2760 of 2018 vide order dated 13.04.2022 directed the OP as follows:

18. Consequently, respectfully following the decisions of the Hon’ble Supreme Court and this Commission as well as for the reasons stated above, we partly allow the present Consumer Complaint with a direction to the Opposite Party Developer to refund the deposited amount with interest @9% p.a. from the respective date of deposit till payments, within a period of six weeks from the date of passing of this order falling which the amount shall carry interest @ 12% pa for the same period. Besides, Complainants shall also be entitled for a Rs.50,000/-.

2. As against which the OP- Builder had filed Appeal before the Hon’ble Supreme Court vide Civil Appeal No.4514 of 2022, Kapstone Constructions Pvt. Ltd. Vs. Anuj Biswas & Ors, the Hon’ble Supreme Court vide order dated 03.09.2025 dismissed the Appeal. Therefore, the order of this Commission dated 13.04.2022 in CC/2760/2018 has attained finality.

3. The contention with respect to the liability of the OP in the matter also stood clarified vide, order of this Commission dated 08.01.2026 as follows:

It is clarified that the liability of the OP in terms of the Order of this Commission dated 13.04.2022, para 18 is further clarified as follows:-

“The liability of the OP to pay interest @ 9% per annum shall be paid by the OP from the respective dates of deposits till payments within a period of six weeks after the said order of this Commission. Failing which, the interest liability for subsequent period shall be @ 12% per annum”.

4. As regards refund of the amount deposited, along with compensation in compliance of the order of this Commission dated 13.04.2022, Decree Holder No.1 appearing in person admits that he has received Rs.1,95,19,240/- on being released by the Hon’ble Supreme Court, since the OP deposited the same during the course of the Appeal before the Hon’ble Supreme Court. He also admits to have received Rs.31,24,695/-from the OP in the form of DD. Thus, the Decree Holder admits to have received a total amount of Rs.2,26,43,935 so far.

5. It is, however, the contention of the Decree Holder that the OP is playing fraud on them and that they are bound to pay further substantial amount on account of shortfall in payments so far. He further alleged that the OPs are constantly misleading this Commission by hiding facts.

6. On the other hand, it is the specific contention of the OP that entire decretal amount has already been paid to the Complainants and that the OP has in fact over paid the Complainant in the form of extra interest to the tune of Rs.18,73,016/- and taxation amounts deposition with public authorities amounting to Rs.18,23,030/-, total Rs.36,96,046/-. She asserts that the Decree Holders are bound to refund the excess amount paid by OP since the Decree Holders are not entitled the same.

7. Considering the nature of the case and the contentions of both the parties, we consider it appropriate to direct both parties to file fresh calculations in compliance of the order of this Commission in CC/2760/2018 dated 08.01.2026 along with payments made /received with details and dates, in terms of Paragraph No.18 of this Commission as further clarified vide order of

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Cases Referred (1)