Gur Co -Operative Group Housing Society Ltd vs B R Tandon

MAIN grievance of the appellant against the impugned order date 1.3.2005 passed by the District Forum is against the award of the interest on the deposit made by the respondent with the appellant Group Housing Society.

BROADLY the facts more or less are not in dispute. Respondent was a member of the appellant society and paid Rs. 4,15,000 towards the cost of the flat. Since he could not pay the so -called payment arising out of the escalation in the price he opted to resign and surrender his membership. His application of surrender of membership was allowed and the money deposited by him was refunded. According to the respondent his resignation was subject to the condition that the amount deposited by him would be refunded with interest i.e., the amount of interest he had paid to the LIC from whom he had raised a loan. On the contrary, the stand of the appellant is that the respondent has been a habitual defaulter and never paid the instalments in time and he offered to resign as he could not afford the price of the flat. It is further contended that the resignation of the respondent was not subject to any condition and as such the appellants society was not liable to pay any interest on the deposited amount. So much so the payments were made late by the respondent and it was he who was liable to pay the interest on the delayed deposits of the instalments. We have perused the impugned order and find that the District Forum in spite of holding the appellant -society not guilty for deficiency in service as respondent had himself surrendered his membership and opted to be out of the society on account of financial constraints has awarded the interest on the ground of equity and fair play. The doctrine of awarding interest on equitable grounds can be pressed in if the opposite party is guilty for deficiency in service.

IN our view the District Forum fell in error as no provider of service can be burdened with the interest if it is not guilty for deficiency of service.

IN the given facts and circumstances of the case, mainly in view of the fact that the respondent defaulted himself in making the payment of instalments on several occasions and in the absence of any such term of the contract between the parties that the resignation was accepted subject to the condition that the amount of interest he had paid to the LIC will be refunded, interest could not have been awarded. In view of the foregoing reasons the impugned order awarding interest @ 12% p.m. is untenable and is liable to be set aside. However, at the most we feel inclined to award Rs. 5,000 as cost of litigation. The appeal is disposed of to the aforesaid extent.

COPY of this order be sent to all the District Forums for future guides.

THE FDR, if any deposited by the appellant, be returned forthwith. A copy of this order as per statutory requirements be forwarded to the parties free of costs and also the concerned District Forum and thereafter the file be consigned to Record Room. Appeal disposed of.