Percy Fernandes vs B. NITHYANANDA SHETTY

THIS appeal is filed by Mr. Percy Fernandes and Ors.-opposite parties against the order dated .2.2003 passed by Karnataka State Consumer Disputes Redressal Commission, directing them to pay a sum of Rs. 9,56,549 within a period of two months from the date of receipt of copy of the order, failing which, they should pay interest @ 24% per annum from that date till the date of payment with cost of Rs. 3,000.

THE case of the complainant-respondents is that they had entered into an oral agreement with the opposite parties-appellants for construction of 3-bedroom apartment in the complex named ''Premier Daffodils'', to be constructed at T.S. No. 746/7 in Bendore Ward of Kadri village at Mangalore city. THE apartment was to be handed over to the complainants by 1st Mach, 1997. THE complainants had paid a total sum of Rs. 5,90,000 to the appellants. THE opposite parties-appellants had neither constructed the apartment nor refudned the money. Complainants sent notice dated 18.9.1999 demanding payment of Rs. 5,90,000 with interest @ 24% p.a. compounded quarterly. After the oral agreement they have failed to achieve the results. In reply dated 27.9.1999 the opposite parties-appellants agreed to pay the entire sum of R. 5,90,000 along with interest thereon. THEy had also refunded a sum of Rs. 4,30,000 upto 30.9.2000. On the date of filing complaint, a sum of Rs. 1,60,000 with interest @ 24% compounded interest was due as also the interest of Rs. 4,30,000 from 29.1.1996 to 13.9.2000 is due. THE complainant-respondents were senior citizens, one aged about 82 years and other aged about 71 years, suffering from vaious ailments. Consequently, they required money for medical treatment and other expenses. Again, notice dated 26.6.2001 was issued demanding the unpaid amount with interest @ 24% compounded quarterly. Ultimately, they filed Complaint No. 198 of 2001 before the Karnataka State Consumer Disputes Redressal Commission. The Commission issued notice to the respondent but they did not appear before the State Commission. The State Commission decided the matter ex parte as aforesaid.

The appellant-opposite parties have filed appeal inter alia on the ground that ex parte order was passed in utter violation of principle of natural justice for no opportunity had been given to them. The appellants bona fide believed that they had appointed a Counsel to appear in their case but he did not appear. In the absence of any written agreement, the State Commission ought not to have granted interest @ 24% p.a. to the respondent. The appellant has already refunded a sum of Rs. 4,30,000 to the respondent. Since the principal amount of Rs. 4,30,000 had already been paid and there was no agreement about rate of interest, the complainant could not claim any interest. The application moved under Order 9 Rule 13, C.P.C. could not treated as review.

THE appellants have virtually not disputed even in appeal (i) the oral agreement for construction of 3 bedroom apartment in the complex named ''Premier Daffodils"; (ii) about receipt of Rs. 4,30,000 on or before 29.1.1996. Besides there is no dispute about the refund of Rs. 4,30,000 on 13.9.2000. In this light the only dispute in between the parties relates to the rate of interest and its calculation and the extent of period for payment of interest.

HAVING heard the parties Counsel and after going through the record, it is evident that the present appeal should succeed partly for the reasons mentioned herein below. The fact there was oral agreement to construct 3-bed room apartment in the complex ''Premier Daffodils'' would be sufficient to reject the contention of the complainant about absence of written agreement. Agreement to hire services of a contractor need not be in writing and conduct of the parties had proved it. It is not sale of property at that stage, which would have required a registered sale deed. In view of admission of receipt of the amount Rs. 4,30,000 as far back as 29.1.1996 and further undisputedly the appellant-opposite parties had failed to handover the possession to the complainant by 1st March, 1997, the appellants were deficient in rendering service.

IN so far as the compensation part is concerned, the complainant could be entitled to interest on the principal amount of Rs. 4,30,000 w.e.f. 29.1.1996 till 13.9.2000.

THE State Commission has awarded compounded interest in respect of period 30.1.1996 till 8.12.2001. We feel that it is against the standard norms and procedents particularly to award compound interest with quarterly rest amounting to Rs. 7,02,247 and simple interest @ 24% per annum from 29.7.1997 to 8.12.2001. THE complainant could claim simple interest alone for complainant and their legal representatives are entitled to get only simple interest. Further, interest could not be compounded in respect of other period. Since the possession of 3-bedroom apartment in the complex ''Premier Deffodil'' had not been delivered on 1st March, 1997 as was agreed to and since the prices of land, building have gone up many times, we feel that interest had to be awarded @ 18% on a sum of Rs. 4,30,000 w.e.f. 29.1.996 to 13.6.2000 i.e., date of payment of Rs. 4,30,000. The amount of interest @ 18% on a sum of Rs. 4,30,000 comes to Rs. 3,57,975 for the aforesaid period. Since this amount had been retained by the appellants, they are liable to pay interest on this amount @ 9% per annum from 14.9.2000 till the date of payment. In case, interest is not paid @ 18% w.e.f. 29.1.1996 to 13.6.2000 on a sum of Rs. 4,30,000 within a period of four weeks from the date of receipt of the order, the appellant-respondent shall be liable to pay interest @ 9% per annum on Rs. 3,57,975 from 14.9.2000 till the date of payment. The appellant shall also pay Rs. 3,000 cost as imposed by the State Commission in addition to above.

The appeal is allowed in part in above terms. Parties are left to bear their own cost. Appeal partly allowed.