GHAZIABAD DEVELOPMENT AUTHORITY vs Chandra Bhan Singh

THIS is an appeal against the judgment and order dated 16.3.2000 passed by District Consumer Forum, Ghaziabad in Complaint Case No. 1057 of 1998.

THE facts of the case stated in brief are that the complainant applied for a duplex house in Govindpuram Housing Scheme on 19.11.1992. The cost of the house was indicated as Rs. 2,40,000/ -. The complainant deposited on various dates amount totalling to Rs. 96,020/ -. A house was reserved for him. The reservation letter was issued for Pasturipuram Scheme while the complainant had applied for Govindpuram Housing Scheme. The complainant had deposited the entire amount with the Ghaziabad Development Authority. The possession of the house has not been delivered to him and he was informed in 1997 that due to unforeseen circumstances the house has been given to Shanti Suraksha Bel. A duplex house in Govindpuram was offered to him, the cost of which was Rs. 6,50,000/ -. The house was beyond the means of the complainant and hence he refused to take this house. The complainant has prayed for refund of the amount alongwith 21% per annum interest. The opposite party in the written version has alleged that the amount of Rs. 96,020/ - was deposited but due to certain unforeseen circumstances the scheme was abandoned and another house was alloted to the complainant which he did not take possession.

LEARNED District Forum, after considering the case of the parties, directed Ghaziabad Development Authority for refunding the amount deposited by the complainant alongwith 18% per annum interest. Compensation and cost of Rs. 100/ - and Rs. 100/ - respectively was also allowed.

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 Forum. We have heard the learned Counsel for the parties and have perused the evidence on record.

LEARNED Counsel for the appellant has argued that due to unforeseen circumstances, all the houses were allotted and possession was also delivered to Shanti Suraksha Bel. Hence the houses could not be given to the complainant. This is clear violation of the terms and conditions of agreement and gross deficiency on the part of the Ghaziabad Development Authority. Instead of handing over possession of the house to the complainant, possession was given to the Shanti Suraksha Bel and the complainant was offered another house which was beyond his capacity. Thus there is gross deficiency on behalf of the Ghaziabad Development Authority. Therefore, the learned District Forum has rightly ordered for refund of the amount alongwith interest and cost etc.

LEARNED Counsel for the appellant has argued that the rate of interest awarded is very much on the higher side. The learned Counsel for the appellant has argued that interest at the rate of 6% per annum should only be 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 Developemnt 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.

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 Honble Supreme Court has allowed interest at the rate of 18% per annum.

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., II (2000) CPJ 1 (SC)=IV =2000 CTJ 205 (SC). In this case the Honble 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 damagesare 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.''

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 purchasers 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''.

ON the question of interest which is to be awarded, the Honble Supreme Court has held that the terms of the brochure issued by the Authority are relevant in a particular case. The Honble 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 406, 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.''

THE rate of interest allowed by the Honble Supreme Court was only 12% per annum. That was the interest on the basis of the facts which were placed before the Honble 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 Honble Supreme Court was on facts of that particular case in which the parties did not lead any evidence. The Honble 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. The facts of the present case are different from the facts of the case decided by Honble 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. Vrindra Gujrati & Ors. v. Bareilly Development Authority & Ors., 1996 (II) Allahabad Rent Cases 383. In pages 22 and 23 of the judgment, the Honble 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 Honble Supreme Court, it is held that in the present case the rate of interest payable shall be at the rate of 18% per annum.

RECENTLY the Honble Supreme Court had an occasion to consider the question of interest in the case of Hayana Urban Development Authority v. Rajnish Chander Sharde, III (2000) CPJ 8 (SC)=VII =JT 2000 (8) SC 154. The short order of the Honble Supreme Court is being reproduced below : ''There is no merit in this appeal considering what has been stated by the appellant in its own written statement filed before the National Consumer Disputes Redressal Commission, we express our surprise that it should have filed this appeal at all. Learned Counsel for the appellant now desires to confine the appeal only to the interest that has accumulated because of the stay order that was passed at the appellants instance by this Court. In the order of the National Commission it is stated that the respondent had claimed compensation for having being compelled to live in rented accommodation from 1982 till 1994 at the rate of Rs. 1,600/ - per month. Instead of making that award, the National Commission directed the appellant to pay interest at the rate of 18% per annum on the amounts that had been deposited by the respondent from time to time from 1979 onwards till a new plot could be allotted to him and possession thereof could be delivered. Given the facts, we see no justification in interfering with that direction and, consequent upon the dismissal of the appeal and the vacation of the stay order, that direction must now be fully complied with.''

Thus there is no force in the appeal and is liable to be dismissed. Order The appeal is dismissed with cost of Rs. 2,000/ - and the judgment and order of the learned District Forum are confirmed. Let compliance of the order be made within a period of two months from the date of this order. Appeal dismissed with cost.