The main legal point established in the judgment is the entitlement of the allottee for refund of the amount paid with reasonable interest in case of delay in possession, the effect of time stipulation in the contract, entitlement to interest or compensation in case of delay, and the factors to be considered while deciding the relief.

Headnote:
R. V. RAVEENDRAN .J. - Consumer Protection - Consumer Protection Act, 1986 (Act for short) - [Section 21, Section 2(0)] - Where a Development Authority forms layouts and allots plots/flats (or houses) by inviting applications, the following general principles regulate the granting of relief to a consumer (applicant for allotment) who complains of delay in delivery or non-delivery and seeks redressal under the Consumer Protection Act, 1986. The court discussed the principles laid down in various cases and highlighted the entitlement of the allottee for refund of the amount paid with reasonable interest in case of delay in possession, the effect of time stipulation in the contract, entitlement to interest or compensation in case of delay, and the factors to be considered while deciding the relief.
Fact of the Case:

The Bangalore Development Authority (BDA) introduced a 'Self Financing Housing Scheme' for construction of flats/houses in Bangalore in 1982. Syndicate Bank made an application for allotment of 250 flats/houses under the scheme. This appeal relates to the delay in delivery of 11 HIG houses at R.MV. Extension, Bangalore. The Respondent filed a complaint under section 21 of Consumer Protection Act, 1986 seeking completion and due delivery of the remaining 11 HIG houses, interest, reimbursement of rent, compensation for mental agony and harassment, and future interest.
Finding of the Court:

The court found that BDA had promised to deliver the houses to the Respondent by December, 1986, and despite repeated demands, the houses were not delivered till the complaint was filed in 1995, indicating deficiency of service on the part of BDA. The court held that BDA was guilty of deficiency in rendering service and directed the appellant to pay interest at 18% per annum on the approximate price of 11 HIG Houses. However, the court found that the respondent was not entitled to any compensation.
Issues: The issues involved in the case were the delay in delivery of the houses, the entitlement of the respondent to interest and compensation, and the maintainability of the complaint under the Consumer Protection Act, 1986.
Ratio Decidendi: The court held that BDA was guilty of deficiency in rendering service and directed the appellant to pay interest at 18% per annum on the approximate price of 11 HIG Houses. However, the court found that the respondent was not entitled to any compensation due to the lack of evidence and failure to prove negligence on the part of BDA.
Final Decision: The court allowed the appeal and set aside the order of the National Consumer Disputes Redressal Commission. The complaint was disposed of with a direction to BDA to complete the process of execution and registration of sale deed/s in respect of the houses without claiming any extra cost, within three months from the date of the decision. The cost of stamp duty and registration in respect of such sale deeds will be borne by the respondent. Parties to bear their respective costs.

Judgment

R. V. RAVEENDRAN .J.

1. This appeal by Special Leave is filed against the order dated 11.04.2002, passed by the National Consumer Dispute Redressal Commission (Commission for short) in O.P. No. 21 of 1995.

The Facts

2. The Bangalore Development Authority (Appe!lant herein, BDA for short) introduced a "Self Financing Housing Scheme" for construction of flats/houses in Bangalore in the year 1982. The said Scheme contemplated construction of three types of fiats/houses categorized as Higher Income Group, Middle Income Group, and Low Income Group (HIG, MIG, and LIG for short). Under the said scheme an applicant for allotment was required to make an initial deposit of 15% of the cost of the unit and pay the balance in eight quarterly installments of 10% and the last instalment of 5%.

3. Syndicate Bank (Respondent herein) made an application dated 17.7.1982 for allotment of 250 flats/houses under the said scheme, that is, 15 HIG Houses, 110 MIG units and 125 LIG units. BDA registered the request for allotment of 15 HIG Houses, vide confirmation letter dated 20.8.1984. This appeal relates to delay in delivery of 11 HIG houses at R.MV. Extension, Bangalore.

4. BDA had initially fixed the tentative price of a HIG house as Rs.2,85.000/-. The price was revised to Rs.4.75 lakhs per unit (Rs.5.5 lakhs in respect of corner units). By letter dated 22.08.1985, BDA informed the respondent about the revision of price of HIG Houses from RS.2.85Iakhs to 4.75lakhs per unit. BDA also indicated the total amount due in respect of 15 HIG Houses and required the Respondent to pay the said amount in installments as shown in the Annexure thereto. BDA also informed the Respondent that the units would be ready for occupation in December, 1986. As respondent did not pay the installments, BDA sent a letter dated 20.10.1986 demanding payment. By letter dated 27.5.1987, BDA informed Respondent that 15 Houses (including three corner houses) had been allotted to Respondent on 16.1.1987 and furnished the numbers of the houses allotted.

5. A sum of Rs.98,85,210/- paid by the Respondent towards the cost of LIG units became refundable to respondent, on account of surrender of allotment of the 125 LIG units. The cost of 15 HIG houses was RS.73.5Iakhs (that is, three corner units at the rate of RS.5.5Iakhs each and 12 other units at the rate of Rs.4.75 lakhs each). The respondent had paid a sum of Rs.19,33,925/- in advance towards the cost of the 15 H.LG. houses and the balance due was Rs.54,16,075/-. By letter dated 15.5.1989, BDA adjusted and appropriated the said sum of Rs.54,16,075/- (due in respect of 15 HIG Houses) and a sum of RS.21 ,66,250/- (due in respect of MIG Units), from out of RS.98,85,210/- paid towards LIG units, and refunded the balance of Rs.23,02,885/- to the Respondent. Thus it would be seen that the cost of H.I.G. units was received by BDA only on 15.05.1989.

6. BDA delivered 4 HIG houses in December, 1989 and May, 1990. The completion of construction and delivery of remaining 11 HIG. houses (in RMV Extension, Bangalore) was delayed. By letters dated 29.11.1989, 17.01.1990,9.7.1993 and 11.1.1994, the Respondent pointed out the delay in delivery of the HIG houses and requested for early delivery of possession of the houses. Respondent also demanded interest on the price paid, at the bank rate from 01.01.1986 till date the delivery of the houses apart from reimbursement of the losses incurred on account of the non-delivery. When the officers of the respondent met the officers of BDA personally to enquire about the 11 Houses, they were informed that the delay was on account of the contractor (M/s. Khoday Engineering) raising a dispute and stopping the work in respect of part of the project, and assured that possession will be delivered immediately after completion. The Respondent issued a final notice dated 11.07.1994 through counsel demanding performance within one month. When BDA failed, the respondent filed a complaint before the Commission unde

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2007 Supreme(SC) 794

Cases Referred (2)