2008 (8) TMI 565 - SC - Companies Law

Whether the Commission was justified in rejecting the application of the appellant by the Orders impugned in these appeals? Held that - Allow these appeals in part and direct the respondent to refund the money already deposited with the GDA with interest at the rate of 18 per cent and not at the rate of 5 per cent. The Commission was also justified in rejecting the claim of the appellant for allotment of a plot in Govindpuram Housing Scheme at Ghaziabad as we find the entire amount of refund with 5 per cent interest was initially accepted by the appellant, but subsequently, as noted herein earlier, she returned the like amount to the GDA. Having accepted the amount and encashed the same, it is no longer open to the appellant to turn around and claim allotment of plot from the GDA.

Issues Involved:
1. Whether the Ghaziabad Development Authority (GDA) engaged in "unfair trade practice" by not allotting a plot to the appellant.
2. Whether the appellant was entitled to the allotment of a specific plot or merely a reservation.
3. The appropriate interest rate for the refund of the deposited amount.

Issue-wise Detailed Analysis:

1. Whether the Ghaziabad Development Authority (GDA) engaged in "unfair trade practice" by not allotting a plot to the appellant:

The appellant alleged that the GDA's cancellation of the allotment was arbitrary, unfair, and illegal, amounting to "unfair trade practice." The Commission, however, found that since the appellant was unsuccessful in the draw of lots, she was not entitled to any plot. Therefore, the charge of "unfair trade practice" against the GDA could not be established. The Supreme Court upheld this finding, noting that the appellant could not acquire any legal right to the plot until she succeeded in the draw of lots. The Commission's decision to reject the claim of "unfair trade practice" was affirmed.

2. Whether the appellant was entitled to the allotment of a specific plot or merely a reservation:

The appellant argued that having made full and final payment within the stipulated period, and a plot being reserved for her, she was entitled to the allotment of a specific plot. However, the GDA contended that the reservation letter did not guarantee the allotment of a specific plot, which was subject to the draw of lots. The Supreme Court agreed with the GDA, stating that the reservation of a plot did not equate to allotment. The final allotment was contingent upon the appellant's success in the draw of lots, which she failed to achieve. Therefore, the appellant was only entitled to a refund of the deposited amount with interest.

3. The appropriate interest rate for the refund of the deposited amount:

The Commission had ordered the refund of the deposited amount with 5% interest, as per Clause 9 of the brochure. However, the Supreme Court found this rate inadequate, given that the GDA had utilized the appellant's money for over seven years. The Court directed the GDA to refund the amount with 18% interest, considering the brochure's stipulation that 18% interest would be levied on the appellant if she failed to deposit the entire amount within the stipulated time. This decision was based on the principle that the interest rate should reflect the period and circumstances of the deposit.

Conclusion:

The Supreme Court upheld the Commission's finding that there was no "unfair trade practice" by the GDA. The appellant was not entitled to the allotment of a specific plot as she was unsuccessful in the draw of lots. However, the Court modified the interest rate for the refund of the deposited amount from 5% to 18%, recognizing the extended period for which the GDA held the appellant's money. The appeals were allowed in part, with no order as to costs.

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