Holding

The Court affirmed the award of 18% interest as compensation for the refund but excluded interest for the period covered by the stay order, and reiterated the authority's duty to prioritize public interest.

Summary

The appellant, Brij Pal Sharma, had paid full consideration for a housing plot under two different schemes of the Ghaziabad Development Authority (GDA). In the first case the original Karpoori Puram Scheme was cancelled and a new scheme was launched, leading to a refund claim; in the second case possession could not be delivered because a stay order halted development work. Both matters were before the Consumer Disputes Redressal Forums, which ordered a refund with interest at 18% per annum. The Supreme Court upheld the award of 18% interest as compensation in both appeals but held that no interest is payable for the period during which the stay order prevented construction. The Court also reiterated that a statutory authority, being a State entity under Article 12 of the Constitution, must act in the public interest, though it did not award any further relief. Both appeals and the accompanying contempt petition were dismissed.

Issues considered

Whether interest at 18% per annum may be awarded as damages/compensation on the refunded amount for non‑allotment of a plot under the Consumer Protection Act, 1986.
Whether interest should be payable for the period during which a court‑issued stay order prevented development and possession of the plot.
Whether the conduct of the Ghaziabad Development Authority violates its duty to act in the public interest under Article 12 of the Constitution.

Legislation cited

Constitution of Indias. Article 12
Consumer Protection Act, 1986

Subjects

Consumer Protection Actinterest awardplot allotmentpublic intereststate authorityArticle 12stay ordercompensation

Judgment

A BRIJ PAL SHARMA
v.
GHAZIABAD DEVELOPMENT AUTHORITY

AUGUST 18, 2005

B [ARIJIT PASAYAT AND H.K. SEMA, JJ.]

Consumer Protection Act, 1986-Allotment of Plot-Deposit of full
amount-However, failure to deliver possession-On the ground of Can-
cellation of Scheme in one case and prevention of development/construction
C of work on account of stay order-Interest @ 18% on refunded amount,
grant of-Correctness of-Held : Justified-However, no interest would be
payable for the period for which development/construction work was
prevented by the stay order-Furthermore, the manner in which the
Development Authority dealt with public interest deprecated-Development
Authority being State is duty bound to act for public interest overlooking
D private interest-Constitution of India, 1950, Article 12.

Respondent-Development Authority floated a Scheme for allot-
ment of housing plots. Appellant applied for a plot and deposited the
final payment. With regard to Civil Appeal No. 5122 of 2005, the plot
could not be allotted as the Scheme was cancelled and new Scheme was
E floated. With regard to Civil Appeal No. 549 of 2003 possession of the
plot could not be delivered to the allottee because the development/
construction work was prevented by the stay order granted by High
Court. Appellant filed complaint and the District Forum, State Commis-
sion and National Commission directed refund of the amount with 18%
F interest per annum. Hence the present appeals and the contempt peti-
tion.

Dismissing the appeals and the Contempt Petition, the Court

HELD : I.I. The grant of interest @18% per annum by way of
G damages and compensation on the refunded amount for non-allotment
of plot of land is justified in both the appeals. However, in Civil Appeal
No. 549 of 2003, no interest would b1.; payable for the period when the
development/construction work was prevented by the stay order and as

H
such the authority could not deliver possession to anybody.

768
(772-E, G; 773-A, BJ
-
B.P. SHARMA v. GHAZIABAD DEVELOPMENT AUTHORITY [H.K. SEMA, l.l 769

Ghaziabad Development Authority v. Balbir Singh, [2004) 5 SCC 65, A
relied on.

1.2. The manner in which the statutory Authority-Development
Authority dealt with the public interest is deprecated. The statutory
authority, likeGhaziabad Development Authority, being the State within B
the ambit of Article 12 of the Constitution, is duty bound to act in a
manner, which would benefit the public interest, overlooking the private
interest. It is trite law that when the private interest is pitted against the
P"blic interest, the later must prevail over the former. Furthermore, in
future such instances would be examined on their own merits. [773-C, DJ
c
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5122 of
2005.

From the Judgment and Order dated 26.4.2002 of the National Con-
sumers Disputes Redressal Commission, New Delhi in R.P. No. 1460 of D
2000.

WITH

C.A. No. 549/2003 and C.P.(C) No. 614/2004 in C.A. No. 549 of2003.
E
S.C. Paul, Manoj Kulshrestha, O.P. Saxena, Ms. Roopa Paul, Sudhir
Kumar and Ms. Rekha Pandey, Advs., for the Appellant.

Vijay Hansaria, Ms. Reena Singh, Ms. Bhakti Pasrija and T. Mahipal
for the Respondent.
F
The Judgment of the Court was delivered by

H.K. SEMA, J.: Civil Appeal arising out ofSLP(C) 22736 o/2002.

Leave granted.
G
The challenge in this appeal is to the order dated 26.4.2002 passed by
the National Consumers Disputes Redressal Commission (in short 'the
Commission') in Revision Petition No. 1460 of 2000.

Briefly stated, the facts are as follows: H
770 SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R.

A The respondent authority, namely the Ghaziabad Development Au-
thority, floated a Scheme called Karpoori Puram Scheme for allotment of
housing plots under the Self Financing Scheme. Pursuant thereto, the ap-
pellant applied for a plot of land measuring an area of90 sq. mtrs. This was
sometime in the month of July, 1991. On 30th July, 1994, the appellant
B deposited a sum of Rs. 96,948 as total and final payment (i.e. Rs. 81,020
as actual cost and Rs. 15,948 as interest on delayed payment). The allotment
of the plot was due sometime in 1997. However, the land in question could
not be allotted to the appellant on the ground that the Karpoori Puram
Scheme had been cancelled and a new scheme had been floated by the name

c of Swam Jayanti Puram. Aggrieved thereby, the appellant filed complaint
to the District Forum, State Commission and National Commission, which
after considering the facts of the case, inter-alia, directed refund of the
amount alongwith interest @ 18% per annum.

The grievance of the appellant is that in the guise of the cancellation
D of Karpoori Puram Scheme another scheme was floated styled as Swarn
Jayant Puram over the same plot of land with a view to deprive the innocent
citizens of their due share for allotment of plot in their favour for which they
had deposited the amount and had legitimate expectations of getting plot of
land in their favour. According to the appellant, a fraudulent practice has
E been played by the respondent upon the innocent law abiding citizens,
thereby earning wrongful gain at the cost of wrongful loss to the helpless
and innocent citizens.

In fact, in an identical case, cancellation of Karpoori Puram Scheme
F had been considered by this Court in the case of Ghaziabad Development
Authority v. Balbir Singh, [2004] 5 SCC 65 wherein this Court had depre-
cated the manner in which the statutory authority had dealt with the public
interest as sought to be done in the present case. This Court in the facts and
circumstances of that case had held that the grant of interest @ 18% per
G annum by way of damages and compensation was quite justified. In para-
graph 21 of Balbir Singh's case (supra), this Court held as under:

"21. In a scheme known as "Karpuripuram Scheme" plots were
allotted, monies collected. However, thereafter the Scheme was
cancelled. In some of the matters we have seen that the District
H
BP. SHARMA v. GHAZIABAD DEVELOPMENT AUTHORITY [H.K. SEMA, J.] 771

Forum has recorded that the authority could give no explanation A
as to why the Scheme was cancelled. Before us some sort of
explanation is sought to be given. In our view, irrespective of
whether there was genuine reason to cancel or not, the monies must
be returned with interest at the rate of 18%. We say so because it
is clear that even ifthe body has not already floated another scheme B
on the same land it is clear that the body is going to derive great
profit from this land and therefore compensating the allottee with
interest at 18% per annum is just and fair."

In our view, therefore, having regard the facts and circumstances of
the case in hand are squarely covered by the decision of this Court in Balbir C
Singh (supra). In this vie\V of the matter, we are of the view that nothing
remains to be considered further, though we deprecate the conduct of the
concerned authority, as already pointed out.

For the reasons aforestated, the appeal stands dismissed with no order D
as to costs.

Civil Appeal No. 549 of 2003

This appeal is directed against the judgment and order dated 28.5.2002
passed by the National Consumer Disputes Redressal Commission (herein- E
after 'the Commission') in Revision Petition No. 460 of 1999.

Briefly stated, the facts are as follows:

A Scheme known as Govindpuram Scheme was floated by the Ghaziabad F
Development Authority (in short 'GDA') on 2.10. 1988 for residential houses
and plots. Pursuant thereto, the appellant applied for a plot on 31.10.1988
measuring 200 sq. mtrs. and paid the registration amount of Rs. 13,000 and
costs Rs. 1,27,000 on 31.10.1988. On 31.7.1989, the GDA confirmed the
allotment of plot measuring 200 sq. mtrs. in favour of the appellant. The
GDA also directed the appellant to deposit the balance amount in six half- G
yearly instalments commencing from 5.8.1989 and ending on 30.3.1992
with interest@ 15% per annum in the self financing scheme by way of the
reservation letter. It is stated that the appellant had deposited the entire
amount without any default. It is further stated that the total amount paid
by the appellant comes to Rs. 1,27,000 towards cost of the plot and Rs. H
772 SUPREME COURT REPORTS [2005) SUPP. 2 S.C.R.

A 23, I 00 as interest totaling to Rs. I ,50, I 00. Despite assurances that the
appellant will be intimated about the actual date of possession, no intimation
was received by the appellant even upto 2002. It is stated that instead, the
Vice-Chairman, GDA called a Press Conference on 10.9.1994 stating that
the delivery of possession to allottees of Govindpuram Scheme would not
B be made, due to the reason that the GDA was facing shortage of funds on
account of which work of laying ~ewer lines, construction of roads and
electrification work was incomplete.

Per contra, it was contended on behalf of the GDA that the possession
of the plot in question could not be delivered to the allottee as the stay order
c granted by the Allahabad High Court on 24.4. I 99 I remained in force upto
16. I 2. I 993 and that during the period the stay order was operative, the
development and the construction work was stalled. In the given facts and
circumstances of the case, the Commission awarded interest @ 18% per
annum on the refunded amount by way of damages and compensation.
D
. The grievance of the appellant in this appeal is that the Commission
has awarded interest @ 18% per annum only on the refunded amount but
failed to direct the GDA either to hand over the allotted plot or in alternate
allot a plot in the subsequent scheme at the cost, to be charged from the
appellant, who had applied for in the original scheme. In our view, this
E contention is not tenable, as the appellant is not permitted to say that he is
entitled both the best of the world. The interest at the rate of 18% is granted
by way of damages and compensation for non-allotment of plot of land.

In the case of Ghaziabad Development Authority v. Balbir Singh,
F [2004) 5 SCC 65 facts of this case have also been considered elaborately
by this Court (in para 12 at page 82 SCC) justifying the grant of interest
@ 18% per annum by way of damages and compensation.

In the given facts and circumstances of the case, as recited above, we
are clearly of the view that the grant of interest @ 18% per annum was
G justified in the present case also.
'
In that view of the matter this case is also covered by the decision in
Balbir Singh 's case (supra).
l
\
In this case also, admittedly, an interim order granted by the Allahabad I,
H
B.P. SHARMA v. GHAZIABAD DEVELOPMENT AUTHORITY (H.K. SEMA. J.J 773

High Court was in operation for the period from 24.4.1991to16.12.1993. A
The Commission held that no interest is payable for the aforesaid period
basing on the report submitted by the Vice-Chairman of the authority that
the development/construction work was prevented by the said stay order and
because of that the authority could not deliver possession to anybody. We
have accepted the said finding of the Commission in paragraph 25 (at page B
86 SCC) of our judgment in Balbir Singh (supra).

In the given facts and circumstances of the case, as recited above, we
are of the view that there is no merit in this appeal and it is accordingly
dismissed with no order as to costs.
c
We, however, clarify that dismissal of the appeal should not be con-
strued as approval of the conduct of the statutory authority in the manner
in which it is sought to be done. The statutory authority, like GDA, being
the State within the ambit of Article 12 of the Constitution, is duty bound
to act in a manner, which would benefit the public interest, overlooking the D
private interest. It is trite law that when the private interest is pitted against
the public interest, the later must prevail over the former. If such instances
are brought to the notice of the court in future, they would be examined on
their own merits.

•
Contempt Petition (Civil) No. 614 of 2004 E

Jn Civil Appeal No. 549 of 2003

In view of our order in Civil Appeal No. 549 of 2003, the contempt
petition does not survive and it is accordingly closed F
N.J. Appeals and contempt petition dismissed.