GHAZIABAD DEVELOPMENT AUTHORITY vs RAMESH CHANDRA SAXENA

BOTH these appeals have been filed against the judgment and order dated 9.1.1998 passed by District Consumer Forum, Ghaziabad in Complaint Case No. 464/1995. Hence they are being taken up together and disposed off by a common judgment.

THE facts of the case stated in brief are that the complainant applied for a plot in Govindpuram Scheme and deposited a sum of Rs. 7,200/- as seservation amount on 28.10.1988. Till 29.1.1992 he deposited a sum of Rs. 82,374/- in instalments including the interest also. THE possession was to be given by 1991. 5% of the plots were reserved for Government employees above the age of 50 years. Complainant''s age is 53 years and he has been given possession of the plot on 25.1.1997. THE complainant has prayed for 18% per annum interest on the deposited amount and a sum of Rs. 3,00,000/- as compensation. The opposite party in its written version has alleged that the period of possession which was indicated in the brochure was only tentative and there was a stay order of Hon''ble High Court from 24.4.1991 to 16.12.1993. There is no deficiency on behalf of the opposite party.

The learned District Forum, after considering the case of the parties, directed the opposite party to pay interest at the rate of 15% per annum on the deposited amount within a period of two months. The learned District Forum also awarded Rs. 500/- to the complainant as cost of the proceedings. It was also ordered that if the compliance of the order is not made within two months, then interest at the rate of 18% per annum shall be payable.

AGGRIEVED against the order of the learned District Forum, both the parties have come in appeal and have challenged the correctness of the order passed by the District Forum. We have heard the learned Counsel for the parties and have perused the evidence on record.

LEARNED Counsel for the Ghaziabad Development Authority has argued that as the possession has been taken, no cause of action survives to the complainant. It has further been argued that the date of delivery of possession was merely tentative and the delay has occurred on account of the stay order passed by the Hon''ble High Court. Learned Counsel for the complainant has argued that the interest should have been ordered to be paid from the date of deposit. A perusal of the file will go to show that the scheme was floated in the year 1988 and the possession was to be delivered in 1991. According to the Ghaziabad Development Authority there was a stay order of the Hon''ble High Court which was operative from 24.4.1991 to 16.12.1993. This fact is correct. The Hon''ble High Court had passed a stay order that the construction shall not start if the same has not been started as yet. On account of this stay of the Hon''ble High Court, the development work even on the plots was affected. Ghaziabad Development Authority was not in a position to hand over possession of a duly developed plot during the duration of the stay order. Therefore, the complainant is not entitled to any interest during this period and the learned District Forum has not correctly awarded any interest during this period. Thus the complainant cannot get interest from the date of deposit but from the date fixed by the learned District Forum.

ACCORDING to learned Counsel for the Ghaziabad Development Authority no cost should have been awarded. When the Ghaziabad Development Authority did not hand over possession within the time fixed and the complainant had to file the complaint the cost has to be paid by the Ghaziabad Development Authority.

THE learned Counsel for the complainant has argued that the learned District Forum should have directed for payment of interest at the rate of 18% per annum and not at the rate of 15% per annum. On the other hand learned Counsel for the Ghaziabad Development Authority has argued that the rate of interest should not have been at the rate of 15% per annum. 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 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.

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.

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) SLT 654=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 application 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."

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".

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) SLT 545=(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 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 one 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. 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. Recently the Hon''ble Supreme Court had an occasion to consider the question of interest in the case of Haryana Urban Development Authority v. Rajnish Chander Sharde, III (2000) CPJ 8 (SC)=VII (2000) SLT 142=JT 2000 (8) SC 154. The short order of the Hon''ble 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 fixed 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 appellant''s 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."

The result is that Appeal No. 328/1998 filed by the Ghaziabad Development Authority is liable to be dismissed and Appeal No. 365/1998 filed by the complainant is liable to be allowed in part and the rate of interest is awarded at the rate of 18% per annum instead of 15% per annum as awarded by the learned District Forum. Order The Appeal No. 328/1998 is dismissed and Appeal No. 365/1998 is partly allowed to the extent that the rate of interest awarded by the learned District Forum is increased to 18% per annum instead of 15% per annum. The rest of the judgment of the learned District Forum is confirmed. Cost of Rs. 2,000/- of this appeal shall be paid by the Ghaziabad Development Authority to the complainant. This judgment shall be placed on the records of Appeal No. 328/1998 and a certified copy of this shall be placed on the record of Appeal No. 365/1998. Let compliance of the order be made within a period of two months from today. Let copy as per rules be made available to the parties. Appeal No. 328/1998 dismissed. Appeal No. 365/1998 partly allowed.