BHUBANESWAR DVELOPMENT AUTHORITY & ORS. vs SABITRI SETHI

This first appeal has been filed under section 19 read with section 21(a)(ii) of the Consumer Protection Act, 1986 against the impugned order dated 21.10.2011, passed by the Odisha State Consumer Disputes Redressal Commission (hereinafter referred to as ''the State Commission'') in consumer complaint No. 151/2002, vide which, the complaint filed by the respondent/complainant Smt. Sabitri Sethi was allowed and it was held that she was liable to make payment of a sum of 3,06,000/- to the appellant/OP Bhubaneswar Development Authority (hereinafter referred to as the Authority) as payment of interest for the delayed period of two years only, at the rates stipulated in the brochure.

The facts of the case are that the Authority floated an offer for sale of core houses under 01-02 Scheme at Jaydev Vihar, Bhubaneswar. In response to their advertisement, the complainant/respondent submitted an application and also deposited a sum of 4,00,500/- on 13.01.99. The said house was allotted to the complainant vide allotment letter dated 02.02.99. As per clause 4 (iii) of the brochure containing detailed terms and conditions of payment, the complainant was required to deposit the balance amount of 8,50,000/- within three months from the date of issue of allotment letter. The complainant represented to the Authority for allowing him to make payment in instalments, rather than the down payment. However, the said request was not accepted by the Authority. The complainant then approached the Federal Bank for grant of loan after obtaining ''No Objection Certificate'' from the Authority. Ultimately, the amount of 8,50,000/- was deposited on 08.05.2001 with the Authority after raising the said loan from the Bank. The Authority vide their letter dated 08.06.2001 demanded a further sum of 3,22,015/- towards interest for the delayed payment of the cost.

The main issue concerned in the case is that the Authority is demanding interest for the delay in payment of the amount in question @18% p.a. as per the terms and conditions laid down in the brochure. According to the Authority, the payable amount of interest for the period of delay from 2.05.99 to 09.05.2001 comes out to be 3,09,353/-. However, since the said amount of interest was not paid by the complainant, the Authority is demanding further interest @18% p.a. till date. According to the calculations made by the Authority, the outstanding dues as on 31.01.2012 are 9,07,226/-. However, on the other hand, the complainant has alleged deficiency in service and unfair trade practice on the part of the Authority on various counts, including the late delivery of possession etc.

The State Commission after taking into account the averments of the parties, concluded as follows:- "Since the complainant, who is no doubt a consumer, has already made payment of the full cost of the house, she is only liable to make payment of the interest for the defaulted period of two years at the rate stipulated in the brochure. As already indicated hereinbefore, she is liable to make payment of an amount of Rs.3,06,000/- towards the said interest, and we direct her to make payment of the same within a period of two months from the date of this order. At the same time, we direct the opposite parties to receive the said amount and execute lease deed in favour of the complainant within a month from the date of receipt of the aforesaid amount."

At the time of arguments, the learned counsel for the appellant Authority stated that the order passed by the State Commission, was not in accordance with law, because the Authority had the right to charge interest @18% p.a. from the complainant on all outstanding dues. The interest should, therefore, be allowed to the Authority till date.

We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.

From the facts of the case, it is very clear that the State Commission has allowed interest to the Authority for the entire period of default on the part of the complainant, in making payment of the balance amount of 8,50,000/- for the said property. However, the assertion made by the appellant Authority that they are entitled to charge further interest on the outstanding amount, is not appropriate, because the Authority has no right to charge ''interest on interest''. The order passed by the State Commission, therefore, does not suffer from any infirmity, illegality or jurisdictional error of any kind. We, therefore, do not find any force in this appeal and the same is ordered to be dismissed and the order passed by the State Commission is upheld. There shall be no order as to costs.