M/S. SOVEREIGN DEVELOPERS AND INFRASTRUCTURE LTD. vs GAURAV CHAKRABORTY & ANR.

The travel and allied expenses, as directed to be paid, vide order dated 11.08.2016, have since been paid to Counsel for the Respondents/Complainants.

Delay condoned.

Challenge in this First Appeal, under Section 19 r/w 21(a)(ii) of the Consumer Protection Act, 1986, by a real estate developer, namely, M/s Sovereign Developers & Infrastructure Ltd., the sole Opposite Party in the Complaint, is to the order dated 08.01.2016, passed by the Karnataka State Consumer Disputes Redressal Commission, Bangalore (for short "the State Commission") in Consumer Complaint No. 7 of 2014. By the impugned order, the State Commission, while accepting the Complaint, filed by the Complainants, alleging deficiency in service on the part of the Appellant in not delivering the possession of the residential apartment by the stipulated date, despite having received full sale consideration, has directed the Appellant to refund to the Complainants a sum of 17,05,400/-, deposited by them, with interest @ 18% p.a. from the date of payment till realization, along with costs, quantified at 25,000/-.

In view of the fact that in the Written Version filed on behalf of the Appellant, it was stated that they were ready and willing to refund the full amount of consideration received from the Complainants along with interest @ 9% p.a., the short question arising for consideration in this Appeal is whether or not the State Commission was justified in awarding interest @ 18% p.a. on the amount deposited by the Complainants?

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

Learned Senior Counsel appearing for the Appellant has submitted that since the delay in the completion of the apartment in question was beyond the control of the Appellant, inasmuch as the cost of construction had escalated, and the Appellant had not enforced any right to recover additional amount because of escalation in the cost of construction and the general recession in the real estate, the award of interest over and above 9% p.a., which the Appellant was and still ready to pay to the Complainants, is not justified.

Per contra , learned Counsel appearing for the Complainants has submitted that since the Complainants had made full payment towards the cost of the flat much prior to the stipulated date of delivery, i.e. 30.11.2012, which, at best, could be extended by three months, and the fact that the Appellant could not complete the project even as on the date of filing of the Complaint in the year 2014, as also the fact that the Complainants were deprived of the possession of flat, resulting in loss on account of payment of rent and on account of payment of interest on the loan raised for making payments to the Appellant, the State Commission was fully justified in awarding interest at the afore-stated rate.

Having bestowed our anxious consideration to the facts at hand and bearing in mind the fact that admittedly the project is not complete till today; the entire property is the subject matter of proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; and as per the averment in the Written Version to the effect that the Appellant was willing to refund the amount(s) deposited by the Complainants with interest @ 9% p.a. but did not demonstrate its bonafides by tendering the amount refundable as per its own stand, we are of the view that interests of justice would be sub-served if the Appellant is directed to pay to the Complainants interest @ 15% p.a., instead of 18% p.a., as directed in the impugned order.

At this juncture, it is also pertinent to note that on 11.08.2016, when the Appeal came up for motion hearing, the Appellant was directed to deposit in this Commission the principal amount, deposited by the Complainants, along with interest @ 9% p.a., which it was willing to refund in the year 2014, within four weeks from the date of the said order but, unfortunately, the said order also has not been complied with.

For all these reasons, the Appeal is partly allowed to the extent indicated above. We direct that the amount due in terms of the order passed by the State Commission, as modified above, shall be paid by the Appellant to the Complainants within four weeks from today, failing which the State Commission shall proceed with the pending Execution proceedings and try to take a final decision therein as expeditiously as possible, so that the Complainants are not made to suffer further harassment and mental agony at the hands of the Appellant.

The Appeal stands disposed of in the above terms with no order as to costs.