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2025 (3) TMI 1396 - SCH - Indian LawsModification of National Consumer Disputes Redressal Commission s (NCDRC) order by awarding an increased interest rate of 15% per annum on the refund amount - delay on the part of the respondent in not completing the construction within the agreed period - HELD THAT - The NCDRC having taken note of the relevant aspects including the factum of delay and the fact that petitioner had opted for refund of money deposited rightly held that as a home buyer petitioner cannot be compelled to take possession of the flat after such long time and as such ordered for refund of entire amount deposited with interest of 9% p.a. Placing reliance on the law laid down by this Court in Bangalore Development Authority v. Syndicate Bank 2007 (5) TMI 565 - SUPREME COURT wherein a coordinate Bench of this Court dealing with the question of grant of relief to a consumer in cases of delay of delivery of possession held that when possession of the allotted plot/flat/house is not delivered within the specified time the allottee is entitled to a refund of the amount paid with reasonable interest thereon from the date of payment till the date of refund. In the present case the High Court by the impugned order modified the finding of NCDRC and awarded interest @ 15% p.a. primarily relying upon the judgment of this Court in Rohit Chaudhary and another v. Vipul Ltd. 2023 (9) TMI 1569 - SUPREME COURT wherein this Court in order to balance the equities and to compensate the loss caused to the purchaser/complainant who had booked an office premise for his use directed the refund of the amount paid along with interest @ 12% p.a. from the date of complaint till the date of payment. However the issue in the instant case relates to allotment of a 3 BHK flat after payment of sale consideration and delay in delivery of same. As such the NCDRC considering the entirety of the facts and circumstances of the case had awarded interest @ 9% p.a. which in our view was fair and reasonable. The interest @ 15% p.a. awarded by High Court is excessive. Therefore the impugned order hereby is setaside and the order dated 27.07.2022 passed by NCDRC in so far as it relates to award of interest @ 9% on the respective deposit till the date of actual payment is restored. Conclusion - i) The NCDRC s award of 9% interest per annum is deemed fair and reasonable considering the complainant s choice for a refund and the delay in possession. ii) The High Court s enhancement of interest to 15% per annum is excessive and not justified under the circumstances. iii) The compensation amount is reduced from Rs. 10, 00, 000 to Rs. 7, 50, 000 to balance the interests of justice considering the appellant s status as a state instrumentality. The appeal stands partly allowed.
ISSUES PRESENTED and CONSIDERED
The primary legal issues considered in this judgment were:
ISSUE-WISE DETAILED ANALYSIS Issue 1: Modification of Interest Rate by the High Court The legal framework involved the Consumer Protection Act, which addresses deficiencies in service and provides for compensation. The NCDRC initially awarded a 9% interest rate, considering the delay in delivery of possession. The High Court increased this to 15%, citing the lack of justifiable reasons for the reduction by the NCDRC. The Court interpreted the precedents set in cases such as 'Bangalore Development Authority v. Syndicate Bank', which established that in cases of delayed possession, the allottee is entitled to a refund with reasonable interest. The High Court's reliance on 'Rohit Chaudhary and another v. Vipul Ltd.' was noted, where a higher interest rate was awarded to balance equities. The Court found that the NCDRC's decision to award 9% interest was fair and reasonable given the circumstances, including the petitioner's choice to opt for a refund rather than possession. The Court concluded that the High Court's enhancement to 15% was excessive and restored the NCDRC's order. Issue 2: Additional Compensation The High Court had awarded Rs. 10,00,000/- as compensation for the delay and harassment suffered by the petitioner. The Court considered whether this amount was justified, given the statutory duties of the respondent, an instrumentality of the State. In balancing the equities and considering the lack of personal animosity by the officers involved, the Court deemed it appropriate to reduce the compensation to Rs. 7,50,000/-. This adjustment was intended to meet the ends of justice while acknowledging the institutional nature of the respondent. Issue 3: Deficiency in Service and Unfair Trade Practice The facts established a clear delay in the delivery of possession, which constituted a deficiency in service under the Consumer Protection Act. The petitioner had paid the full consideration, and the delay was acknowledged at various judicial levels. The Court applied the law to the facts by affirming the NCDRC's finding of deficiency and the appropriateness of a refund with interest. The competing argument from the respondent, emphasizing the reasonableness of the NCDRC's interest rate, was upheld. SIGNIFICANT HOLDINGS The Court held that:
The core principle established was that while consumers are entitled to compensation for delays and deficiencies, the interest rate and compensation must be reasonable and justifiable based on the facts and precedents. The final determination restored the NCDRC's order regarding the interest rate and adjusted the compensation, partially allowing the appeal with no order as to costs.
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