Supreme Court of India
HARYANA URBAN DEVELOPMENT AUTHORITYversusRAJE RAM
- Citation
- 2008 INSC 1217
- Decided
- 23 October 2008
- Disposal
- Appeal(s) allowed
Holding
The award of interest to the re‑allottees was not warranted and the orders of the consumer forums were set aside.
Summary
The Haryana Urban Development Authority (HUDA) had originally allotted plots to allottees who later transferred their rights to new buyers (re‑allottees) after price revisions and delays in development. The re‑allottees filed complaints before consumer forums alleging delay in possession and seeking interest on the amounts they had deposited. The District Forum, State Commission and National Consumer Redressal Commission awarded interest (initially 18% per annum, later reduced to 15%). HUDA appealed, arguing that the re‑allottees were not the original consumers, that they had accepted the delay, and that time was not of the essence of the contract. The Supreme Court held that interest could not be awarded to the re‑allottees, set aside the lower‑forum orders, dismissed the complaints, and allowed HUDA to recover the interest it had already paid. The Court relied on earlier decisions such as Ghaziabad Development Authority v. Balbir Singh, HUDA v. Darsh Kumar, and Bangalore Development Authority v. Syndicate Bank.
Issues considered
- Whether interest can be awarded to re‑allottees under the Consumer Protection Act for delay in possession of allotted plots.
- Whether the rate of interest awarded (18%/15% per annum) is excessive.
- Whether the re‑allottees qualify as 'consumers' within the meaning of the Consumer Protection Act, 1986.
- Whether the development authority is entitled to restitution of interest already paid to the re‑allottees.
Legislation cited
Subjects
Consumer Protection Actinterest awarddelay in possessionre‑allotmentdevelopment authorityrestitutionconsumer dispute redressalurban developmentcontract lawcompensation
Judgment
[2008] 16 S.C.R. 601
HARYANA URBAN DEVELOPMENT AUTHORITY A
v.
RAJE RAM
(Civil Appeal No. 2381 of 2003)
OCTOBER 23, 2008 B
[R. V. RAVEENDRAN AND AFTAB ALAM, JJ.]
INTEREST:
Allotment of plots to re-al/otees by Development Authority C
- Delay in delivery of possession - Re-allottee invoking
provisions of Consum~r Protection Act - Consumer forums
awarding interest to re-allottees - HELD: Claimants are not
the original allottees - In spite of knowing the fact of delay in
delivery of possession, and the time not being essence of the o
contract, they accepted re-allotment - They ~ven did not pay
-1 full price when they approached the District Forum - In the
circumstances, award of interest was neither warranted nor
justified - Orders of District Forum, State Commission and
National Consumer Redressal Commission set aside - E
Development Authority entitled to restitution and recover back
the amount paid - Consumer Protection ;;ict, 1986 - Award
of interest to re-al/ottee of plot - Urban Development.
Ghaziabad Development Authority v. Balbir Singh 2004
i
(5) SCC 65; HUDA v. Darsh Kumar 2005 (9) SCC 449 and F
Bangalore Development Authority v. Syndicate Bank 2007 (6)
sec 711, relied on.
Case Law Reference:
2005 (9) sec 449 relied on para 6 G
2004 (5) sec ss relied on para 7
2001 (6) sec 111 . relied on para 7
601 H
602· SUPREME COURT REPORTS [2008] 16 S.C.R
~·
A· CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2381 of2003.
From the final Order and Judgment dated 27.8.2002 of the
National Consumer Disputes Redressal Commission, New
B Delhi ·in Revision Petition No. 2173 of 1999.
WITH
· G.A. No. 2382/2003 and C.A. No. 3413/2003.
c Satinder S. Gulati, Dr. Kailash Chand and Kamaldeep
Gulati for the Appellant.
'
C-
Jaspreet Gogia for the Respondent. "
The following Order of the Court was delivered :
D
ORDER
'
These appeals by special leave challenge three identical ;. .
orders of the National Consumer Disputes Redressal
Commission ('National Commission' for short).
E
CA No. 2381/2003 [HUDA vs. Raje Ram]
2. Plot No. 545, Sector 14, Hissar was allotted to Madanlal
on 12.12.1986. The allottee had deposited 25% of the cost of
the plot. On 15.1.1993, the appellant notified the revision of
F t
price.from Rs.224.90 to Rs.301.70 per sq. yard and gave an
option to the allottee to either accept the revision or receive
back :the initial deposit with interest at 10% per annum. The •
allottee and. respondent sought transfer of allotment to the name
of respondent.
. The request was accepted. and the appellant re-
G ·allotted the plot to the respondent vide letter dated 15.3.1994
,/
subje't~t to payment of extension fee. Aggrieved. by .the non- . .,
delivery of possession of the allotted" pfot, resp.o.ndent
approached tbe District Consumer Disputes Redressal forum,
Hissar in the year 1997. The appellant contested the claim on
H several grounds. The appellant also offered possession of the
604 SUPREME COURT REPORTS [2008] 16 S.C.R.
A CA. No. 3413/2003 fHUDA vs. Sunil Kumar] "
4. Plot No. 1051, Sector 14-P, Hissarwas allotted to one _)
Anjani Kumar-on 21.3.1986. By letter dated 5.8.1989, the
appellant offered to refund the deposit if he did not want to wait
till the development was completed. In 1993, the appellant
B
notified the revision of price which was not paid. The original
allottee sought transfer of allotment to the name of respondent
and the appellant permitted the transfer on 9. 7 .1996 and re-
allotted the plot to the respondent by re-allotment letter
no.14662 dated 21.8.1996 subject to payment of extension fee.
c Alleging non-delivery of possession of the allotted plot,
respondent filed .Complaint no.451 /1997 before the District
Consumer Disputes Redressal Forum, Hissar, seeking interest
on the amounts deposited, from the date of payment, among
other reliefs. The appellant contested the claim. The District
D Forum by order dated 15.4.1998 directed the appellant to pay
interest at the rate of 18% per annum to the respondent on the
amounts deposited from the expiry of two years from the date
of deposit till the date of offer of possession. The appellant
challenged the award of interest by filing an appeal before the
E State Commission. The appellant also offered possession of
the plot on 25.11.1998. The State Commission reduced the
interest from 18% per annum to 15% per annum from the date
of re-allotment till delivery of possession, by order dated
10.5.1999.
F t <;
The common issue /
I
}
5. The appellants challenged the said orders of State
Commission contending that no interest was payable. The
National Consumer Redressal Commission by its. non-speaking
G orders dated 27.8.2002, 30.9.2002 and 27.8.2002, disposed
of the said revisions filed by the Deyelopn'1ent Autho'rity, in
terms of its earlier decision in Haryana l.:Jrban Development
•
Authority vs. Darsh Kumar (Revision Petition No. 1197/1998
decided on 31.8.2001) by merely observing that it had upheld
H the award of interest upto 18% per annum in similar
HARYANA URBAN DEVELOPMENT AUTHORITY v. RAJE 605
RAM
1
circumstances. The National Commission did not refer to or A
consider the facts of these cases. The said orders are
challenged in these appeals by special leave. The common
issue in all these cases is whether interest could have been
awarded against the appellant, and if so whether the rate of
interest is excessive. B
r
6. The decision of National Commission in Darsh Kumar,
followed in the impugned orders, did not find favour of this Court
in HUDA v. Darsh Kumar - 2005 (9) SCC 449. This Court
observed that where possession is given at the old rate, the
party bas got the benefit of escalation in price of land, and c
therefore, there cannot and should not be award of interest on
the amounts paid by the allottee on the ground of delay in
allotment. On the special facts of that case, this Court however
awarded compensation for harassment/mental agony.
D
7. Respondents in the three appeals are not the original
-1 allottees. They are re-allottees to whom re-allotment was made
by the appellant in the years 1994, 1997 and 1996 respectively.
They were aware, when the plots were re-allotted to them, that
there was delay (either in fOi'ming the layout itself or delay in E
delivering the allotted plot on account of encroachment etc). In
spite of it, they took re-allotment. Their cases cannot be
compared to cases of original allottees who were made to wait
for a decade or more for delivery and thus put to mental· agony
and harassment. They were aware that time for performance
F
was not stipulated as the essence of the contract and the .
original allottees had accepted the delay. The appellant offered
possession to respondents (re-allottees) and they took
possession of the respective plots on 27.6.2002, 21.3;2000,
and 13.9.1999 respectively ... They approached the District
>-- Forum in 1997, within a short period from the dates of re- G
-- 1
allotment in their favour. They had not paid the full price when
they approached the District Forum. In the circumstances,
having regard to the principles laid down by this Court in
Ghaziabad Development Authority v. Balbir Singh - 2004 (5)
-- H
606 SUPREME COURT REPORTS [2008) 16 S.C.R.
A SCC 65; .Darsh Kumar (supra) and Bangalore Development t
Authority v. Syndicate Bank - 2007 (6) SCC 711, we are of
the view that the award of interest was neither warranted nor
justified.
8. We accordingly allow these appeals and set aside the
8
impugned orders of the District Forum, State Commission and
National Commission awarding interest. The complaints stand
dismissed.
9. The appellant states that· it had paid interest in
C pursuance of the State Commission's orders as there was no
order of stay, to the respondents in two of the app~als
(Rs.23308/-was paid to respondent in CA No. 2381/2003 on
14.10.1999 and Rs. 70572/-was paid to the respondent in CA
3413/2003 on 13,7.1999). If so, the appellant is entitled to
o restitution and it can recover back the amounts paid to the
respective respondent.
I·
RP. Appeals allowed.
-·
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