Cases Referred:

Advocates:
Counsel for the Parties :
For the Appellant :Mr. Ram Raj, Advocate.
For the Respondent: None.

ORDER

Mr. Justice K.C. Bhargava, President—This is an appeal against the judgment and order dated 7.7.1994 passed by District Consumer Forum, Ghaziabad in Complaint Case No. 1090 of 1993.

2. The facts of the case stated in brief are that the complainant had applied for an MIG house in Govindpuram Housing Scheme. He deposited the entire amount according to the payment schedule, when a house was reserved for him. The possession of the house was promised to be delivered to him in December, 1991. The complainant had also paid penal interest of Rs. 34,164/-. Even after depositing the amount of Rs. 1,75,000/- the possession has not been delivered. A notice was, therefore, given by the complainant on 1.9.1993 for delivering possession of the house. The complainant has prayed for delivery of the possession and interest at the rate of 18% per annum on deposited amount of Rs. 2,09,164/- and Rs. 50,000/- as compensation and Rs. 1,500/- per month as rent which has been paid by the complainant.

3. The opposite party in its written version has alleged that the complainant wanted a change in the house. Therefore, he was allotted a house in Govindpuram. The complainant deposited the entire amount alongwith interest. The interest has been demanded in accordance with the rules. The complainant cannot challenge the cost which has been fixed by the opposite party. It is further alleged that the contractor had not completed the work in time and there was a stay order of the Hon’ble High Court. Therefore, the possession could not be given in time.

4. The learned District Forum after considering the case of the parties, directed the opposite party to pay interest on the deposited amount from 1.1.1992 at the rate of 15% per annum till the date of payment. It also awarded Rs. 500/- as cost and Rs. 1,000/- as damages. It also allowed Rs. 200/- as cost which was not paid during the proceedings of the case. It also directed that the possession of the house complete in all respects should be delivered within two months.

5. Aggrieved against the order of the learned District Forum, Ghaziabad Development Authority has come in appeal and has challenged the correctness of the order passed by the District Forum.

6. We have heard the learned Counsel for the appellant as well as respondent.

7. Learned Counsel for the appellant has argued that the delay has been on account of non-completion of work on time. This plea cannot be allowed to be taken by the appellant because contractors were kept by the appellant and if they were not doing the work properly and in time, then the same could have been got done from other contractors. This cannot be said to be a cause which was beyond their control.

8. Learned Counsel for the appellant, Ghaziabad Development Authority, has argued that on account of the stay order of the Hon’ble High Court the work of development was affected. This argument of the learned Counsel is not factually correct. In the writ petition which was filed before the Hon’ble High Court, the order passed by the Hon’ble High Court is as under :

“List this petition on 30.4.1991. Meanwhile respondent shall not raise any construction on the land in question if constructions have not already commenced.”

9. It is an admitted fact that the Ghaziabad Development Authority had started constructions over the land in dispute before the stay order was passed. Therefore, in terms of this stay order the construction which has already been started by the Ghaziabad Development Authority were not affected and the work continued. The stay order only applies to those lands over which the construction has not already commenced. Moreover, there is no plea of the Ghaziabad Development Authority that the construction has not been started. Therefore, this argument of the learned Counsel for the Ghaziabad Development Authority cannot be accepted.

10. The learned Counsel for the appellant has argued that interest at the rate of 6% per annum should only awarded while the learned Counsel for the complainant has argued that interest at the rate of 18% per annum be awarded. Learned Counsel for the complainant/respondent has placed reliance on the case of Dr. Ramesh Chandra Ramaniklal Shah & Ors. v. Lata Construction Company & Ors., I (1996) CPJ 81 (NC), decided by the National Commission. In that case the possession was not delivered within the time given in the agreement. When the house was not delivered in time the National Commission found that there was a deficiency in service on behalf of M/s. Lata Construction Company and awarded interest at the rate of 18% per annum. Similarly the National Commission in the case of George Thomas & Ors. v. Ghaziabad Development Authority, I (1999) CPJ 18 (NC), has held that the possession was not given to the allottee as per the scheme. The option was given by the Ghaziabad Development Authority to the complainant for taking another plot but the complainant did not agree to this proposition. On the basis of these facts, the National Commission held that there was deficiency in service on behalf of the Ghaziabad Development Authority and allowed interest at the rate of 18% per annum because Ghaziabad Development Authority recovers interest at the rate of 18% per annum on defaults on the amounts payable to it. Thus this case law also shows that the interest at the rate of 18% per annum is payable by the Development Authorities.

11. The learned Counsel for the opposite party has also placed reliance on the case of Surendra Kaur v. Government of Punjab & Ors., (1998) 9 Supreme Court Cases 592. The Hon’ble Supreme Court has allowed interest at the rate of 18% per annum.

12. When the delay is on the part of the Development Authority, it is liable to pay interest to the complainant for the period during which the amount remained deposited with it. The learned District Forum has awarded interest at the rate of 18% per annum from the respective dates of deposits till the date of payment. Learned Counsel for the appellant has argued that the interest awarded at the rate of 18% per annum is on the higher side and has placed reliance on the case of Ghaziabad Development Authority v. Union of India & Anr., IV =2000 CTJ 205 (SC). In this case the Hon’ble Supreme Court has held as under :

“When a Development Authority announces a scheme for allotment of plots, the brochure issued by it for public information is an invitation to offer. Several members of public may make applications for availing benefit of the scheme. Such applications are offers. Some of the offers having been accepted subject to rules of priority or preferences laid down by the Authority result into a contract between the applicant and the Authority. The legal relationship governing the performance and consequences flowing from breach would be worked out under the provisions of the Contract Act and the Specific Relief Act except to the extent governed by the law applicable to the Authority floating the scheme. In case of breach of contract, damages may be claimed by one party from the other who had broken its contract obligation in some way or the other. The damages may be liquidated or unliquidated. Liquidated damages are such damages as have been agreed upon and fixed by the parties in anticipation of the breach. Unliquidated damages are such damages as are required to be assessed. Broadly the principle underlying assessment of damages is to put the aggrieved party monetarily in the same position as far as possible in which it would have been if the contract would have been performed. Here the rule as to remoteness of damages comes into play. Such loss may be compensated as the parties would have been contemplated at the time of entering into the contract. The party held liable to compensation shall be obliged to compensate for such losses as directly flow its breach.”

13. The Supreme Court goes to say that “the ordinary heads of damages allowable in contracts for sale of land are settled. A vendor who breaks the contract by failing to convey the land to the purchaser is liable to damages for the purchaser’s loss of bargain by paying the market value of the property at the fixed time for completion less the contract price. The purchaser may claim the loss of profit he intended to make from a particular use of the land if the vendor had actual or imputed knowledge thereof. For delay in performance the normal nature of damages is the value of the use of the land for the period of delay viz., usually its rental value”.

14. On the question of interest which is to be awarded, the Hon’ble Supreme Court has held that the terms of the brochure issued by the Authority are relevant in a particular case. The Hon’ble Supreme Court has distinguished the case of Sovintorg (India) Limited v. State Bank of India, New Delhi, II (1999) CPJ 4 (SC)=VI =(1999) 6 SCC 46, in which the rate of interest was enhanced to 15% per annum. It was observed as under :

“However, in the case before us, the parties have not tendered any evidence enabling formation of opinion on the rate of interest which can be considered ideal to be adopted. The rate of interest awarded in equity should neither be too high or too low. In our opinion awarding interest at the rate of 12 per cent per annum would be just and proper and meet the ends of justice in the cases under consideration. The provision contained in the brochure issued by the Development Authority that it shall not be liable to pay any interest in the event of an occasion arising for return of the amount should be held to be applicable only to such cases in which the claimant is itself responsible for creating circumstances providing occasion for the refund. In the cases under appeal the fault has been found with the Authority. The Authority does not, therefore, have any justification for resisting refund of the claimants’ amount with interest.”

15. The rate of interest allowed by the Hon’ble Supreme Court was only 12% per annum. That was the interest on the basis of the facts which were placed before the Hon’ble Supreme Court. The Court itself has observed that in that case which was before it, the parties have not tendered any evidence enabling formation of any opinion on the rate of interest which can be considered ideal to be adopted. Thus the case which was decided by the Hon’ble Supreme Court was on facts of that particular case in which the parties did not lead any evidence. The Hon’ble Supreme Court observed that it may come to a definite conclusion on the rate of interest on the basis of peculiar facts of the case.

16. The facts of the present case are different from the facts of the case decided by Hon’ble Supreme Court. Here in the brochure issued by the Development Authority provision is there that if the amount is not paid in accordance with the Schedule mentioned in the brochure, then the interest for the delayed period shall be charged at the rate of 18% per annum. Thus when the Development Authority is charging interest at the rate of 18% per annum if any delay is made in the payment of instalments, then the same applies to it also. When the Development Authority has made provision for charging penal interest at the rate of 18% per annum on delayed payments, then on principles of equity and law, it is bound to pay interest at the same rate. In case of George Thomas & Ors. v. Ghaziabad Development Authority (supra), the National Commission has held that the interest payable shall be 18% per annum because the Development Authority is charging the same rate of interest from the allottees in case they fail to pay instalment in time. The rate of interest payable to the allottees who had deposited the amount for taking the flat from the Development Authority came before a Full Bench of Allahabad High Court in the case of Smt. Vrinda Gujrati & Ors. v. Bareilly Development Authority & Ors., 1996 (II) Allahabad Rent Cases 383. In pages 22 and 23 of the judgment, the Hon’ble High Court has held that the persons who have applied for taking a flat, there is a statutory obligation cast upon the Authorities to complete the same within the time schedule mentioned in the offer and if they fail to discharge the same, the affected allottees are entitled for the interest for the delayed delivery of possession, as the allottees have parted with the money which was earning interest. It was also held that the petitioners are entitled to get interest at the rate of 18% per annum for the delayed delivery of possession on the amount deposited by him till the actual date of delivery of possession. Therefore, keeping in view the facts of the case and law applicable to it as laid down by Hon’ble Supreme Court, it is held that in the present case the rate of interest payable shall be at the rate of 18% per annum.

17. Thus the appeal is liable to be dismissed.

Order

18. The appeal is dismissed and the judgment and order of the learned District Forum are confirmed.

19. Let compliance of the order be made within a period of two months from the date of this order.

20.

Appeal dismissed.

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