DELHI DEVELOPMENT AUTHORITYversusP.R. SAMANTA

                        [2015] 8 S.C.R. 776


A              DELHI DEVELOPMENT AUTHORITY
                                 v.
                          P.R. SAMANTA
                  . (Civil Appeal No. 3 OF 2003)
B                         JULY21, 2015

        [VIKRAMAJIT SEN AND SHIVA KIRTI SINGH, JJ.]

        Monopolies and Restrictive Trade Practices Act, 1969 -
c s. 55-Appeal under - Scheme for allocation of self financing
  society flats - Rejection of allotment offer by respondent-
  allottee - Refund of registration amount alongwith 7% interest
  in terms of the offer document - However, respondent
  claiming interest@ 15% pa in place of 7% pa - Respondent's
D case that interest paid on registration amount was less than
  the rate at which the applicants are to be charged in case of
  delay/default-Award of interest@ 12% pa on the registration
  amount as also Rs.5,0001- towards litigation charges by
  Commission - Correctness of- Held: Order passed by the
E Commission is against law and unjustified - Commission
  erred in compensating the respondent with a higher rate of
  interest - In absence of relevant pleadings and evidence it
  cannot be presumed that appellant resorted to any unfair
  trade practice or increased its price unreasonably or made
F unreasonable earnings by investing the registration amount
  in accounts bearing higher interest - Relevant provision in
  the Brochure of the scheme by itself does not appear to be
  unreasonable in allowing interest@ 7% p.a. - Order passed
  by the Commission set aside.
G
        Allowing the appeal, the Court

        HELD: 1.1 The Commission erred in interfering with
    the contractual rate of interest in absence of any finding
H                              776
  DELHI DEVELOPMENT AUTHORITY v. P.R. SAMANTA 777


against the actions and orders of the appellant. The A
judgment and order under appeal indicates no material
for coming to the impugned finding that payment of
interest on the registration amount should not be less
than one charged from the applicants when they commit
a default. A default clause is introduced to deter any delay B
or default and hence, such penalty is by its very nature
a deterrent one. That by .itself offers a reasonable
justification for the appellant to charge a higher rate of
interest in the case of delay/default. So far as interest on
the registration amount is concerned, it stands on a C
different footing. In absence of relevant pleadings and
evidence it cannot be presumed that the appellant has
 resorted to any unfair trade practice as defined under
Section 36A or has increased its price unreasonably or· D
 made unreasonable earnings by investing the
 registration amount in accounts bearing higher interest.
The relevant provision in the Brochure of the 1985
scheme by itself does not appear to be unreasonable in
allowing interest @ 7% p.a. Thus, the order of the E
Commission awarding interest at the rate of 12% per
annum on the registration amount and also award of
Rs.5000/- towards litigation charges is against law and
unjustified, thus, set aside. [Paras 10, 11] [781-G-H; 782-
A-C, F-G]                                                    F
    CIVILAPPELLATE JURISDICTION: Civil Appeal No. 3 of
2003.
  ·From the Judgment and Order dated 20.08.2002 of the
Monopolies and Restrictive Trade Practices, Commission, G
New Delhi in Compensation Application No. 367of1997.
    Manika Tripathy Pandey for the Appellant.
    The Judgment of the Court was delivered by
                                                            H
    SHIVA KIRTI SINGH, J. 1. This statutory appeal under
778         SUPREME COURT REPORTS                   (2015] 8 S.C.R.


A     Section 55 of the Monopolies and Restrictive Trade Practices
      Act, 1969 (hereinafter referred to as 'the Act') is directed
      against judgment and order dated 20.08.2002 passed by the
      Monopolies and Restrictive Trade Practices Commission,
      New Delhi (hereinafter referred to as 'the Commission') in
B     Compensation Application No.367/97 preferred by the sole
      respondent.

       2. In view of controversy arising for determination being
  very limited and confined to reasonableness of rate of interest
C payable on refund of registration amount, it is not necessary
  to delve deeper into the facts. Suffice to note that the appellant
  Delhi Development Authority is a statutory body constituted
  under the Delhi Development Act, 1957. It is entrusted with
  the planned development of Delhi and claims to function on a
D No Profit No Loss basis in the matter of providing subsidized
  housing to different in_come groups. The appellant invited
  applications from eligible members of the general public during
  the period May 1985 to August 1985 in a scheme described
  as Sixth Self Financing Housing Registration Scheme, 1985. ·
E The respondent deposited the requisite sum of Rs.15000/-
  and by filing application became a member of that scheme. In
  due course the appellant released a scheme for allocation of
  self financing society flats. Pursuant to advertisements
F published by the appellant the respondent vide his application
  dated 27.02.1991 opted for a flat at either of three locations,
  namely, (1) Sarita Vihar, (2) Kondli Gharoli and (3) Narela. He
  was allotted a flat at Narela but the offer was declined by the
  respondent on 27.10.1991.
G      3. In the year 1995 under a similar fresh scheme the
  persons who had registered with the appellant were required
  to indicate their preferences for upto 14 localities mentioned
  in the BrochureAnnexure 'A' and 'B'. The advertised terms
H and conditions clarified that the registrants not indicating their
  preferences for 14 localities will be allocated/allotted flats which
  DELHI DEVELOPMENTAUTHORITYv. P.R. SAMANTA                  779
              [SHIVAKIRTI SINGH, J.]

would be available after accommodating the preferences and A
choices of the registrants applying in terms of advertisement
and the allotment would be through draw of lots. The
respondent gave his preference only for 6 localities. He could
not be accommodated against any of his 6 preferred localities
but as per draw of lots he was allotted a flat in Dwarka. On B
receipt of the allotment letter dated 14/22.03.1995 the
respondent through his letter dated 17.5.1995 declined the
offer on the ground that the allotment was not as per his
preferences. He demanded the registration deposit of
Rs.15000/- made in 1985 along with an interest@ 15% p.a. C
in place of 7% p.a. indicated in the scheme and the Brochure
on the ground that the deposit would have earned a minimum
of 15% interest if it was deposited in a Class I company.

     4. The appellant chose to accept the proposal for D
cancellation of allotment made by the respondent but it
refunded the registration amount along with only 7% interest
in terms of the offer document which had been accepted by
the respondent and was thus the rate finalized by agreement
between the parties.                                         E

      5. The respondent in his complaint before the Commission
filed on 29.6.1997 raised two-fold grievances which have been
noted by the Commission in paragraph 3 of the impugned
judgment. The first grievance was against the levy of F
cancellation charges and penalty when the flat allotted to him
was not in the 6 localities for which he had indicated his
preference. The second grievance of the respondent was that
the interest paid on the registration amount is at a rate lower .
than the rate at which the applicants are to be charged in case 8
of delay/default.

     6. After noticing the relevant provisions in the Brochure
for 1985 scheme the Commission found no merit in the first
grievanqe of the respondent since clause 5.5 of the Brochure H
780         SUPREME COURT REPORTS                      [2015] 8 S.C.R.


A     made it clear that allotment of flat as per preference would
      depend on its availability and it was not the case of the
      respondent that in spite of availability of flats in the localities
      preferred, the same was not allocated to the applicant.

B         7. The Commission thereafter considered the next
      grievance in respect of rate of interest in the penultimate
      paragraph of the judgment which reads as follows :

          "The applicant's main grievance is against the payment
c         of the interest on the registration amount, which is less
          than the one charged from the applicants when in default.
          I find substantial force in this plea of the applicant and
          would award interest@ 12% per annum on the registration
          amount as against the one paid by the Respondent
o         authority. The rate of interest at 12% per annum is
          considered to be reasonable and equitable and has also
          been awarded in other cases in the similar circumstances.
          The applicant is also awarded a sum of Rs.5,000/- towards
          litigation charges which the Respondent is directed to pay."
E
       8. lnspite of notice the respondent has not chosen to
  appear nor he has filed any counter affidavit. We have heard
  learned counsel for the appellant and perused the relevant
  materials on record including the order under appeal.
F According to learned counsel for the appellant when the main
  grievance of the respondent in respect of levy of cancellation
  charges and penalty was not found acceptable by the
  Commission and when the Commission found nothing wrong
  in the action of the appellant in the light of declared policy and
G contract governing the matter at hand, it should not have
  enhanced the contract rate of 7% interest over registration
  amount on the singular ground that it was less than the one
  charged from the applicants when in default. According to
  learned counsel for the appellant the Commission was wholly
H unjustified in interfering with the contractual terms and
  DELHI DEVELOPMENTAUTHORITYv. P.R. SAMANTA                     781
              [SHIVAKIRTI SINGH, J.]

conditions and directing the appellant to pay a higher rate of A
interest at 12% p.a. on the specious plea that such rate in the
consideration of the Commission was reasonable and
equitable and had been awarded in some other cases. The
award of litigation charges of Rs.5000/- was also seriously
contested when the Commission had not found any action of B
the appellant to be unfair, monopolistic or increasing the cost
of production unreasonably.

      9. The Act was enacted with the object of preventing the
concentration of economic power to the common detriment, C
for the control of monopolies, forthe prohibition of monopolistic
and restrictive trade practices and for matters connected
therewith or incidental thereto. It has now been replaced by
the Competition Act, 2002. The terms 'monopolistic trade
practice' as well as 'restrictive trade practice' have been D
defined and undoubtedly the Commission had the jurisdiction
and power to inquire into any restrictive trade practice or any
monopolistic trade practice in view of Section 10 of the Act
and also into unfair trade practice as stipulated in Section 36A.
                                                                  E
     10. Considering the submissions advanced on behalf of
the appellant as well as the discussion and reasonings in the
impugned order in respect of rate of interest, we find sufficient
merit in the submissions advanced on behalf of the appellant.
The Commission has clearly erred in interfering with the F
contractual rate of interest in absence of any fjnding against
the actions and order~ of the appellant. Without returning a
finding that there was any unfair trade practice or any restrictive/
monopolistic trade practice pursuant to inquiry under the
provisions of the Act, the Commission clearly erred in G
compensating the respondent with a higher rate of interest.
Even the basis for grant of higher interest is without discussion
of any material. The judgment and order under appeal indicates
no material for coming to the impugned finding that payment H
of interest on the registration amount should not be less than
                  •
                      •
782           SUPREME COURT REPORTS                    (2015] 8 S.C.R.


A      one charged from the applicants when they commit a default.
      A default clause is introduced to deter any delay or default and
       hence such penalty is by its very nature a deterrent one. That
      by itself offers a reasonable justification for the appellant to
      charge a higher rate of interest in the case of delay/default. So
B     far as interest on the registration amount is concerned it stands
      on a different footing. In absence of relevant pleadings and
      evidence it cannot be presumed that the appellant has resorted
      to any unfair trade practice as defined under Section 36A or
      has increased its price unreasonably or made unreasonable
C     earnings by investing the registration amount in accounts
      bearing higher interest. The relevant provision ill the Brochure
      of the 1985 scheme by itself does not appear to be
      unreasonable in allowing interest@ 7% .p.a. It is relevant to
D     indicate here that nothing has been brought to our notice which
      may show that the registration amount is to remain locked for
      any fixed term or that the appellant can refuse an application
      for cancellation of registration at an early stage or even before
      draw of lots for allotment/allocation of flats. In such a situation
E     it is not possible to infer that the registration deposits must
      reasonably be kept in long term fixed deposits with a view to
      earn higher interests. In any case such aspects had to be
      pleaded and proved by the respondent before the Commission
      but that has not been done leading to absence of requisite
F     findings.

      11. Accordingly, we find the impugned order of the
  Commission awarding interest at the rate of 12% per annum
  on the registration amount and al.so award of Rs.5000/-
G towards litigation charges to be against law and unjustified.
  The impugned judgment and order is therefore set aside. The
  appeal stands allowed. However, in the facts of the case the
  appellant shall itself bear its cost of litigation.

H     Nidhi Jain                                           Appeal allowed.