SURESH KUMAR SHARMA vs Ghaziabad Development Authority

PETITIONER Suresh Kumar Sharma, complainant before the District Consumer Disputes Redressal Forum, Ghaziabad (District Forum for short), has filed this revision petition against the order dated 04.04.2006 passed by U.P. State Consumer Disputes Redressal Commission, Lucknow (State Commission for short), whereby it has allowed the revision filed by respondent/opposite party/Ghaziabad Development Authority against the order dated 30.08.2005 passed by the District Forum issuing recovery certificate against them.

FACTS, in brief, are that the petitioner-complainant had allegedly applied for a HIG house measuring 135 sq. meters costing Rs.3,10,000/- in Vaishali Scheme of the respondent/authority. In the brochure it was stated by the respondent/authority that the construction would be of high quality as doors, windows, marble etc. of good quality would be used in the construction. The petitioner-complainant allegedly deposited the entire cost of the house in time and was issued allotment-cum-possession letter dated 15.01.1993, whereby additional demand of Rs.71,700/-, besides lease rent of Rs.8860/-, was also made by the respondent-authority, which the petitioner-complainant paid. When the petitioner-complainant went to see the House No. 4/047 allotted to him, he found that no civic facilities were provided and that apart, contrary to the specification, in the brochure, the material used was also of very inferior quality and to his dismay the area of the plot was only 128 sq. meters. The petitioner-complainant got the house inspected by Shri D.P. Goel, Valuer Architect, who also supported the above deficiencies on the part of respondent-authority. According to the petitioner-complainant, the cost of the house was Rs.2,72,500/- whereas he was charged exorbitantly at Rs.3,90,560/-. In this background, the petitioner filed a complaint before the District Forum praying for certain reliefs. The District Forum on appreciation of the evidence produced by the parties vide its order dated 27.01.1994, observing that the complainant cannot be compelled to take possession of incomplete house in undeveloped colony, held that the complainant was entitled to receive the refund of the entire amount with interest and accordingly allowed the complaint and directed the respondent-authority to pay the amount of Rs.3,90,650/- to the petitioner-complainant along with 18% interest p.a. within a period of one month. Cost of Rs.1000/- was also imposed on respondent-authority.

It appears that the respondent-authority challenged this order of this District Forum before the State Commission in Appeal No. A/321/SC/94 but managed to obtain stay order only on the 26th of April, 1994. Meanwhile, however, an execution application was filed by the petitioner-complainant before the District Forum and the respondent-GDA, under the threat of coercive action, had paid a sum of Rs.3,90,560/- which was the total amount deposited by the petitioner-complainant sometime during July, 1994. The State Commission after a long lapse of seven years vide its order dated 08.08.2001 dismissed their appeal and confirmed the order of District Forum and also directed them to pay Rs.2000/- towards cost of litigation to the petitioner-complainant within a period of two months from the date of the order. Against this order of the State Commission, the respondent authority filed a revision petition before the National Commission, who vide its order dated 18.03.2003 dismissed the same on the ground of limitation.

THE respondent-GDA feeling aggrieved on the dismissal of their revision on the technical grounds of limitation alone without its consideration on merit, filed an SLP before the Honble Supreme Court. It appears that they failed to obtain any stay. THErefore, in essence the order of the District Forum to refund the sum of Rs.3,90,560/- with 18% interest, after the dismissal of their appeal by the State Commission, became final and absolute. Thus, from the records it is clear that the respondent-GDA failed to initiate any action either to pay the amount of interest on the refund of Rs.3,90,560/- after the dismissal of their appeal on the 8th of August, 2001 or to challenge the order of the State Commission in time and obtain a stay from the National Commission. While the revision petition of respondent-GDA was pending before the National Commission after the dismissal of their appeal by the State Commission, the petitioner-complainant filed an execution application before the District Forum. In the absence of any stay from the National Commission, the District Forum ordered action under Section 27 of the Consumer Protection Act, 1986 against the respondent-GDA, which ultimately resulted in the payment of a sum of Rs.2,09,837/- after deducting a sum of Rs.24,383/- towards income tax on 10th of March, 2003. Alleging that this amount should have been paid to him during the year 1994 along with the refund of his deposit of Rs.3,90,560/-, the petitioner-complainant approached the District Forum for the award of interest over the interest which was not paid earlier. Vide its order dated 9th of March, 2004, the District Forum has held that that the petitioner-complainant was entitled to interest on interest @ 8% for the period from 22.02.1994 till 11.02.2003. A recovery certificate to that effect was also issued. The respondent-GDA aggrieved thereupon filed a revision petition before the State Commission, U.P., Lucknow, who vide the impugned order dated 4th of April, 2006 has allowed the revision setting aside the grant of 8% interest on interest. The petitioner-complainant is aggrieved by this order of the State Commission and has filed this revision petition before us.

WE have heard Shri Suresh Kumar Sharma, the petitioner-complainant, who has himself argued his case at length. WE have also heard the learned counsel for the respondent-GDA and have carefully perused the available records of the case. Undoubtedly, there is a chequered history behind this case. Records produced by either side do not give the complete and transparent picture of the developments behind the dispute. The petitioner-complainant has attempted to make out a case as if he was the original allottee of a HIG flat in the Vaishali Scheme whereas from the records it now appears that one Suryakant Gupta was the original allottee, who after having paid few installments against the estimated cost of the flat requested the respondent-GDA to transfer it in favour of the present petitioner on 8th of February, 1991. His request being allowed, the respondent-GDA issued a letter of allotment in favour of the petitioner-complainant on the 15th of January, 1993 informing therein that the final cost of Rs.80,560/- was to be paid by him. Strangely enough, after about six months of its re-allotment the present petitioner having got the flat transferred in his favour from the erstwhile allottee filed a complaint before the District Forum in July, 1993 alleging deficiency in service, inasmuch as claiming that the construction of the house was sub-standard, much below what was promised and demanded refund of the amount deposited with 18% interest. Since it was a case of re-allotment, the petitioner-complainant must have visited and seen the flat of the erstwhile allottee before making a request for its re-allotment by the respondent-GDA on transfer from the erstwhile allottee. He, therefore, could not have raised any objection with regard to the construction of the flat being sub-standard or it had many defects. Strangely, it appears that he filed a complaint claiming to be the original allottee and sought the refund of the entire cost of the flat. To be noted that major part of the cost had been deposited by the erstwhile original allottee and in the absence of the details of the terms of the agreement entered into by the petitioner-complainant with the erstwhile original allottee, it could not be said that the petitioner-complainant was entitled to refund/interest on the amount deposited by the erstwhile original allottee. Unfortunately, we have neither a copy of the complaint nor the WS of the respondent-GDA on record to know the true facts.

BE that as it may, since the respondent-GDA have failed to present their case before the fora below properly, the only point that needs our consideration, at this stage, when the respondent-GDA had paid the entire deposited amount of Rs.3,90,560/- to the petitioner-complainant during July, 1994 and a stay against the operation of the District Forum order had been granted by the State Commission only on 26th of April, 1994 and further when the respondent-GDA has paid a sum of Rs.2,09,837/- after deducting an amount of Rs.24,383/- towards income tax on the 10th of March, 2003; is as to whether the petitioner-complainant would be entitled to any interest on that amount of interest calculated @ 18% and already paid to him.

DURING the proceedings before us, we had asked both the parties to submit their respective statement of accounts so as to find out as to what was the exact amount demanded by the petitioner-complainant and paid by the respondent-GDA but we are sorry to observe that neither side has assisted us in the matter so as to arrive at the true picture. To us, it appears that the petitioner-complainant was entitled to 18% interest on the deposit of Rs.3,90,560/- which was made in different installments mostly by the erstwhile original allottee during the years 1989 to 1991 and later for the remaining amount by the present petitioner-complainant after the flats re-allotment during 1993. Since the principal deposited amount had been paid to the petitioner-complainant during July, 1994, at the most he was entitled to interest @ 18% on the various deposits from their respective dates only upto July, 1994 and not beyond that even though the appeal of the respondent-GDA was dismissed by the State Commission on the 8th of August, 2001. However, it appears to us, under the threat of coercive action, the respondent-GDA has already paid a sum of Rs.2,34,220/-. The question, therefore, of further payment on this interest does not arise and the State Commission, in our view, has very correctly allowed the revision petition of the respondent-GDA and has set aside the District Forums order favouring the petitioner-complainant with an element of additional 8% interest on interest. During the course of the argument, learned counsel for the petitioner-complainant has referred to the judgments of the Honble Supreme Court in the cases of Sandvik Asis Ltd. Vs. Commissioner of Income Tax I, Pune and others [(2006) 2 SCC 508] and Commissioner of Income Tax Vs. Narendra Doshi [(2004) 2 SCC 801] and has submitted that interest on interest is very much permissible. The reliance, however, is misplaced inasmuch as the said cases pertain to refund of income tax already paid by the assessee which was lying with the department whereas in the case in hand, the respondent-GDA has already refunded the principal deposited amount even prior to the grant of stay order from the Honble Supreme Court in July, 1994 and has further paid interest @ 18% on that amount from the respective dates of deposits on 10/3/2003. The question of further payment, therefore, does not arise and there is no illegality, irregularity or jurisdictional error in the order of the State Commission warranting any interference at the revisional stage.

In view of the discussion above, we find absolutely no merit in the revision petition and the same is dismissed with a cost of Rs.10,000/- to be paid by the petitioner-complainant to the respondent-GDA within a period of two months.