RAGINI RAMCHANDRAN vs PUSHPA BUILDERS LTD

THIS order will dispose of Miscellaneous Application dated 30th April, 1998. In order to appreciate the points raised, it is necessary to set- out the background briefly as follows.

SMT. Ragini Ramchandran and her husband booked a flat in Pushpa Akash Apartment, which was undertaken to be built by M/s. Pushpa Builders Limited. The complainants spaid certain amounts from time to time. The builder, however, failed to complete the construction and deliver possession of the flat booked by the complainants. The complainants, therefore, filed a complaint registered as C-615/ 93. The opposite party M/s. Pushpa Builders Limited contested the claim of the complainants. By order dated 14.2.1997, the complaint was allowed and the opposite party directed to refund Rs. 3,09,228/- besides 18% interest thereon from the date of deposit till date of refund and Rs. 3,000/-as costs. No appeal appears to have been filed against the order of the State Commission which became final between the parties. The opposite parties failed to pay the amount and the complainants were obliged to file an application under Sections 25/27of the Consumer Protection Act registered as Ex. 115/97 on 9.4.1997. Upon notice in the said application, one Mr. Ram Niwas stated to be Law Officer of the respondent Company appeared. Talks for settling the mode of payment took place from time to time. On 11.9.1997, Mr. Ram Niwas stated that the respondent was willing to make the payment in the same term in which the National Commission allowed the respondent (Pushpa Builders Limited) in Pushpa Builders Flat Buyers Association v. Pushpa Builders Limited, Original Petition Nos.39-70/96 dated 3.2.1997. According to the directions in the aforesaid matter, before the National Commission, the respondent Company was granted stay on the condition that 50% of the amount payable was paid within three months and the remaining amount in accordance with directions to be passed later on. On 19.9.1997, an agreement was reached between the parties. Statement of Mr. Ram Niwas, Law Officer of the respondent Company on the one hand and Mr. P.G. Ramchandran, on behalf of the complainant were recorded and in terms of the said statements, order was passed on 19.9.1997 to the following effect: 50% of the total amount worked-out in terms of the order of the State Commission dated 14.2.1997 in C-615/93 was to be paid on or before 19.12.1997 and the balance 50% together with the interest @ 18% per annum was to be paid in four equated instalments on 21.1.1998, 20.2.1998, 20.3.1998 and 20.4.1998. No payment in terms of the above agreement was, however, made by the respondents. The case was adjourned from time to time and various alternatives repayment were discussed between the parties. On 9.3.1998, Mr. Gurbax Singh, Advocate alongwith Mr. H.L. Soin, Director of the respondent Company made a proposal in writing as to the mode by which the amount was to be repaid. During the pendency of the proposal, certain payments were made from time to time which were duly noted in the orders appearing in the order sheet. Ultimately by order dated 16th April, 1998 and with the tacit consent of the complainant, detailed order regarding the manner of repayment was passed based on one of the two proposals for repayment submitted in writing by the respondent Company. Pending implementation of the order, the present application has been made by the respondent Company through Mr. Harish Uppal, Advocate and the prayer made seeks the following reliefs. (i) That the rate of interest which is 18% as per the order passed in the complaint be revised to 12% instead, (ii) No compounded interest be made payable. According to the respondents, the order dated 14.2.1997 was apparently based on order of the National Commission in Original Petition No. 60/94 which according to the learned Counsel is per incuriam. It has further been contended that the FORA failed to take notice of the law laid-down by the Supreme Court in Bareilly Development Authority and Another v. Ajay Pal Singh, JT 1989 (1) SC 368, in which it was laid-down that the brochure and other terms and conditions offered by the dealer became terms and condition of the contract between the flat buyer and the dealer. According to the respondent, para-5 of the brochure, lays down that in case the building does not get completed or flat to be acquired by the buyer is not constructed, the amount received by the promoter shall be refunded to the buyer with simple interest @ 12% per annum upon his surrendering the original money receipt/other documents, if any, and no other claim shall be made by the buyer or entertained by the promoter. The contention therefore is that the award of interest exceeding 12% including award of interest upon interest which is in nature of a compound interest was contrary to the law laid-down by the Supreme Court and orders to the contrary whether passed by the National Commission or by this Commission deserved to be revised accordingly; so as to bring-down the rate of interest allowed in terms of the binding agreement between the parties. In the reply filed by the complainants, it was highlighted that the opposite party failed to comply with the final order passed in the complaint. It failed again to make the payment in terms of the compromise arrived at with the complainants in execution proceedings. The opposite party failed on third time when the order passed on the proposal of the opposite party itself is being challenged through the present miscellaneous application. It was stated that the order being passed on compromise no challenge thereto could be made. The FORA under the Consumer Protection Act, it was submitted, did not have the power to reviewing its own order and that the present application was frivolous and initiated to delay the payment of the amount in terms of the order of the Commission.

In the rejoinder filed by the applicant, various objections on the merits of the case which might and ought to have been raised in the written version in the main complaint have been sought to be raised. It has further been stated that the FORA had no jurisdiction to order payment of an amount by way of interest which can exceed the principal amount and to that extent the order passed by he State Commission granting 18% interest is without jurisdiction. Even otherwise it has been pointed out that 18% interest was excessive and unreasonable and deserved to be scaled down to 12%. With regard to jurisdiction, it has been stated that the Commission has inherent powers to recall an order which has been passed exceeding the jurisdiction vested in it. With regard to dismissal of SLP against the order of the National Commission in Original Petition No. 60/94 in limine it has been stated that the dismissal of SLP in limine did not, inter alia, imply that the order appealed against had been adopted by the Supreme Court. Reference was also made to various decisions.

WE have heard Mr. Harish Uppal for the applicants and the complainants in person and have carefully gone through the records. In the context of contentions raised by Mr. Uppal it has to be borne in mind that there is a basic difference between interest properly so- called and interest awarded by way of compensation or as compensatory interest. It has not been shown that the order passed by this Commission was appealed against with the result that the order has acquired a finality and is binding between the parties. The finding regarding payment of interest operates as res judicata and it is not open to the opposite party to . challenge the same at this stage. It is well settled law that he principle of res judicata applies not only in subsequent proceedings but at later stages of the same proceedings between the parties. All questions which might and ought to have been raised at the trial of the complaint are deemed to have been decided and the principle of construction res judicata would debar the opposite party from challenging the findings at a subsequent stage on the principle of constructive res judicata. The various authorities relied on by Mr. Uppal are easily distinguishable. In Pushpa Builders Flat Buyers Association v. Pushpa Builders Ltd. & Others, Original Petition 60/94, reported II (1996) CPJ 212 (NC)=1996 (3) CPR 57, the National Commission was dealing with the case of a number of flat buyers who had formed themselves into a Flat Buyers Association as indicated in the title. One of the persons was Mr. S.J.S. Chhatwal. While other flat buyers had made payment of varying amounts in instalments, paid from time to time, Mr. Chhatwal had made the booking with a lumpsum amount under multi-benefit scheme with a buy back guarantee. According to that scheme, the interest payable to Mr. Chhatwal worked-out to 22%. The National Commission awarded 18% interest to other flat buyers and in order to maintain a uniform rate of interest scaled down the claim of Mr. Chhatwal from 22% to 18%. SLP against the order of the National Commission was dismissed by the Supreme Court. The fact that in the peculiar facts and circumstances, the interest rate in the case of Mr. sChhatwal was scaled down to 18% does not furnish any authority for the preposition that the rate of interest awarded in the present case should be revised from 18% to 12%.

IN Rajasthan Housing Board v. R.C. Baldev, Appeal No. 620/94, decided by National Commission by order dated 14.1.1997=I (1997) CPJ 27 (NC), and relied on by Mr. Uppal, State Commission awarded 15% interest on the payment of 1,85,000/- from 1.4.90 to 30.4.92 and the same amount of interest on Rs. 3,08,900/- from 1.5.1992 to 15.2.1992 on which possession of the flat had admitted been delivered to the flat buyer. IN the aforesaid order, the National Commission reduced the interest on 1,85,000/- from 15% to 6% and maintained the interest @ 15% on the sum of Rs. 3,08,900/- for the period 1.5.1992 to 15.2.1992. It has to be remembered that the order was passed in the first appeal and the settled law is that the first appeal is a continuation of the dispute both on law as well as facts. It appears that following the directions of the National Commission in Original Petition No. 60/94, the respondent failed to make payment and S.J.S. Chhatwal filed Company Petition No. 120/94 in Delhi High Court. Counsel appearing for Pushpa Builders undertook to make payment in terms of the order of National Commission. The question whether 20% payment could be withheld by the builder was left open and was to be decided in due course by the National Commission where Original Petition No. 215 / 96 was pending. It was directed that in case payments were not made, it will not be open to the builder to oppose winding up of the Company. The Registrar was directed to calculate interest which the builder was liable to pay in accordance with order of the National Commission. We fail to see how this decision advances the case of Mr. Uppal. The other details relied on by the learned Counsel are clearly distinguishable. These were rendered on the facts and circumstances of those cases. Some of these decisions related to the interest awarded by the Arbitrator under the Arbitration Act. No rule of general application with regard to rate of interest was laid-down. In Indore Development Authority v. Sadhna Aggarwal & Others, JT 1995 (3) SC 1, their Lordship of the Supreme Court went into the facts and circumstances of the case and observed, "As the respondents are in possession of the flats since 1984, without payment of any rent to the appellant, they should not have any grievance in making payment of the balance amount with interest. Still taking all the facts and circumstances into consideration we direct the respondents to. make payment of the balance amount alongwith simple interest @ 6% per annum from the date of obtaining possession of the flat until payment". It is manifest that it was on a consideration of the facts and circumstances of the particular case that the Supreme Court allowed interest @ 6%. This cannot be taken as an authority for the proposition put forward by Mr. Uppal.

THIS brings us to the consideration of the contentions whether the State Commission has inherent jurisdiction to review its order. Mr. Uppal has placed strong reliance on Indian Bank v. Satyam Fibres India Pvt. Ltd., 1998 (2) Co.LJ 421 SC. That was an appeal from the order of the National Commission. It was observed by the Supreme Court that the plea raised before the National Commission was that its judgment dated 16.11.1993, which was based on letter No. 2776 dated 26.8.1991, was obtained by the respondent by practising fraud not only on the appellant but on the Commission too as the said letter was forged by the respondent for the purposes of that case. It was observed that the plea could not have been legally ignored by the Commission. It needed to be reminded that authorities, be they constitutional, statutory or Administrative (and particularly those which have to decide a lis) so far as the power to recall their judgment or orders cannot be disputed if they are obtained by fraud as fraud and justice never dwell together. Their Lordships of the Supreme Court reiterated the time tested saying that fraud, deceit defend or excuse no man. It was in this background that it was laid-down in para 24 of the report at page 431 as under : "24. The Judiciary in India also possesses inherent power, specially under Section 151 of the Civil Procedure Code, 1908, to recall its judgment order if it is obtained by fraud on the Court. In the case of fraud on a party to the suit or proceedings, the Court may direct the affected party to file a separate suit for setting aside the decree obtained by fraud. Inherent powers are powers which are resident in all Courts, especially, of superior jurisdiction. These powers spring not from legislation, but from the nature and the constitution of the Tribunals or Courts themselves so as to enable them to maintain their dignity, secure obedience to their process and rules, protect their officers from indignity and wrong and to punish unseemly behaviour. THIS power is necessary for the orderly administration of the Court''s business".

COMING back to the facts of the present case no case of fraud has been set-up and we are clearly of the view that no case for review within limited powers envisaged by the order of Supreme Court is available to recall the order which has otherwise acquired finality. No order for the grant of compounded interest was passed at any stage. On the contrary, the view taken was that in normal course, the order should have been complied by the opposite party within time frame fixed for the purpose or within a reasonable time of the passing of the order and there was no reason why interest should not be calculated on the amount which became payable by a specified date. In other words, the principle applied was that the respondent should not be able to take advantage of its own wrong by delaying the payment.

No authority has been brought to our notice for the preposition that in no case can the amount of interest exceed the principal amount. The opposite party could easily avoid interest liability by making the payment. For the foregoing reasons, we find the present application to be without any merit and dismiss the same with costs which are quantified as Rs. 2,500/-. A copy of the order be furnished to the parties. Application dismissed with costs.