Holding

The Supreme Court held that the Dr. Monga decision does not establish a principle that compensation under the Consumer Protection Act may be awarded by way of compound interest, and therefore the orders awarding such interest are set aside.

Summary

Anita Merchant booked three flats from Suneja Towers Private Limited, paid 60% of the price, but the builder failed to deliver possession even after the agreed period, leading her to file consumer complaints. The District Forum dismissed the complaints, but the State Consumer Commission reversed the decision, ordering a refund with 14% compound interest, relying on the Dr. Manjeet Kaur Monga case; the National Commission upheld this award. The appellants appealed to the Supreme Court, questioning whether Section 14(1)(d) of the Consumer Protection Act, 1986 authorises the award of compound interest and whether the Monga precedent is binding. The Court held that the ratio of the Monga case does not support awarding compound interest as compensation under the Act and that the lower forums failed to examine the necessary factors, making the award unjustified and leading to unjust enrichment. Consequently, the Supreme Court set aside the State and National Commission orders, but, as an extraordinary measure, allowed the respondent to retain the amount already received (Rs 2.48 crore). No further payment is required from the appellants.

Issues considered

Whether Section 14(1)(d) of the Consumer Protection Act, 1986 empowers Consumer Fora to award compound interest as part of compensation or punitive damages.
Whether the decision in Dr. Manjeet Kaur Monga v. K.L. Suneja is a binding precedent for awarding compound interest in Consumer Protection Act cases.
Whether the State and National Commissions erred in awarding compound interest without a detailed assessment of relevant factors.
Whether the respondent is entitled to retain the amount already received under the impugned orders.

Legislation cited

Subjects

Consumer Protection Actcompound interestcompensationpunitive damagesreal estatedeficiency of serviceprecedentunjust enrichmentconsumer forum

Judgment

1092 [2023]
SUPREME COURT 5 S.C.R. 1092
REPORTS [2023] 5 S.C.R.

A M/S SUNEJA TOWERS PRIVATE LIMITED & ANR.
v.
ANITA MERCHANT
(Civil Appeal Nos. 2892–2894 of 2023)
B APRIL 18, 2023
[DINESH MAHESHWARI AND SANJAY KUMAR, JJ.]
Consumer Protection Act 1986 : s. 14(1)(d) – Award of
compound interest by Consumer Fora – Justification of – On facts,
consumer complaints by the complainant-respondent alleging
C
deficiency of service on the part of the appellants-builder for having
failed to deliver the possession of three flats booked by her, even
after expiry of the agreed period and despite the fact that she had
admittedly made payment of 60% of the total sale consideration –
Dismissed by the District Forum – However, the State Commission
D awarded compound interest in favor of the respondent @ 14 %,
relying upon Dr. Manjeet Kaur Monga’s case – National Commission
upheld the same – On appeal, held: State Commission and the
National Commission passed rather assumptive orders on the basis
of the decision in Dr. Monga that compound interest was required to
be allowed – Various factors recounted on behalf of the respondent,
E
including excessive harassment and denial of the fruits of her
investment could all lead to a reasonable amount of compensation
but, there appears absolutely no reason that compound interest be
allowed in this matter – Award of compound interest had neither
any foundation in the record nor any backing in law nor the
F Consumer Fora took care to examine the contours of their jurisdiction
and the requirements of proper assessment, if at all any compensation
and/or punitive damages were sought to be granted – Awarding of
compound interest with reference to Dr. Monga’s case and without
examining any other factor has led to serious inconsistencies; and
if the award as made is approved, it could only lead to unjust
G
enrichment of the respondent in the name of disgorgement of benefits
purportedly derived by the appellants – Thus, the impugned orders
cannot be sustained and is set aside – However, the respondent
allowed to retain the sum of money already received by her only
because of peculiar circumstances of this case.
H
1092
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1093
MERCHANT

Judgment/order : Precedent – Ascertainment of – Held: A
Judgment is an authority only in regard to its ratio which is required
to be discerned – Decision cannot be regarded as an authority in
regard to its conclusion alone or even in relation to what could be
deduced therefrom.
Allowing the appeal, the Court B
HELD: 1.1 Keeping the principles in Sanjay Singh’s case
in view and for what has been discussed in regard to ratio
decidendi of the decision in Dr. Manjeet Kaur Monga’s case, it is
but clear that the said decision cannot be read in support of the
principle that compensation and/or punitive damages in terms of C
the Consumer Protection Act, 1986 could also be by way of
compound interest. The State Commission awarded compound
interest, and National Commission approved such awarding of
compound interest to the present respondent, only with reference
to the said decision in the case of Dr. Monga. The ratio decidendi
of Dr. Monga is not leading to the enunciation in favour of awarding D
compensation and/or punitive damages by way of compound
interest, the substratum of the orders impugned is knocked to
the ground. [Para 18][1142-F-H]
1.2 In certain eventualities, the legislature has indeed
specified the award of compound interest. Mostly, it has been E
provided so in relation to any monetary involvement having the
trappings of public interests in it. The Consumer Protection Act,
1986, on the other hand, being a beneficial legislation, inter alia,
empowers the Consumer Fora to direct payment of such amount
as may be awarded as compensation to the consumer for any loss F
or injury suffered due to the negligence of the opposite party.
The proviso added to Clause (d) of Section 14(1) of the 1986 Act
empowers the Forum to grant punitive damages in such
circumstances as it deems fit. That being the position, it cannot
be laid down in absolute terms that for no such stipulation
regarding compound interest being available in the 1986 Act, G
the same can never be granted by the Consumer Fora. When the
matter is being considered for award of compensation and/or
punitive damages, want of stipulation in the contract as regards
award of compound or simple interest, cannot be decisive of the
matter. [Para 20][1143-E-G] H
1094 SUPREME COURT REPORTS [2023] 5 S.C.R.

A 1.3 In an action before the Consumer Fora under the Act
of 1986, the forum would be entitled to provide for the amount of
compensation as deemed fit, having regard to the facts and
circumstances of the case and the gravity of the negligence of
the opposite party and consequential injury suffered by the
consumer. The forum could award even punitive damages but
B
that would depend on the relevant circumstances and for that
matter, the relevant factors shall have to be specified. In regard
to such awarding of compensation and/or punitive damages, the
forum concerned could take all the relevant factors into account
and award such amount as deemed fit and necessary but ordinarily,
C in the matters of money refund, awarding of compound interest
as a measure of punitive damages is not envisaged. As to what
would be the quantum of compensation and for that matter, what
would be the quantum of punitive damages, would depend on
facts and circumstances of each case but while awarding so, the
forum would be advised to specify all the relevant factors and
D
basis of its quantification. A shortcut of awarding compound
interest is neither envisaged by the statute nor any such term of
contract between the parties or any such usage is found. The
attempt to seek compound interest in such real estate dealings
did not meet with approval of this Court and such a claim was
E declined for having no nexus with the commercial realities of the
prevailing market. Going by the principles governing the nature
of jurisdiction of the Consumer Fora as also the principles
enunciated by this Court, the proposition of awarding compound
interest in the cases of monetary refund in such dealings is
disapproved. [Para 22][1147-D-G; 1148-A-B]
F
1.4 For award of compound interest, relevant factors shall
have to be taken into account which would include uncertainties
of market and several other imponderables. If at all by way of
compensation, the Consumer Forum considers it proper to
examine the time value for money, an in–depth and thorough
G analysis would be required while taking into account all the facts
and the material surrounding factors, including those of realities
as also uncertainties of market. [Para 23][1148-C-D]
1.5 Awarding of compound interest with reference to Dr.
Monga’s case and without examining any other factor has led to
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1095
MERCHANT

serious inconsistencies; and if the award as made is approved, it A
could only lead to unjust enrichment of the respondent in the
name of disgorgement of benefits purportedly derived by the
appellants. The State Commission and the National Commission
have passed rather assumptive orders on the basis of the decision
in Dr. Monga’s case that compound interest was required to be
B
allowed. Various factors recounted on behalf of the respondent,
including excessive harassment and denial of the fruits of her
investment could all lead to a reasonable amount of compensation
but, there appears absolutely no reason that compound interest
be allowed in this matter. [Para 24][1148-D-F]
1.6 Having regard to the order proposed to be passed, the C
minute calculations and variety of alternatives presented by the
parties are not entered into but, on a broad consideration of the
matter, it is clear that even as per the exemplar sale deeds relating
to the same area and similar flats, the cost of 3 flats booked by
the respondent, as at present, is in the range of 2.25 crore, whereas D
the amount payable under the award in question would be above
Rs. 7.35 crore. The respondent has attempted to compare the
circle rates of the land in the area in question with the submissions
that there were no circle rates of the flats in the year 1989 and
the attempt on her part was to make “apples–to–apples”
comparison and then factorising on the cost of flats. In the first E
place, no such efforts of calculation and assessment were made
before the State Commission or the National Commission by the
respondent. Secondly, the said Consumer Fora have not returned
cogent and convincing findings on the loss or injury of the
respondent with reference to the relevant factors. These aspects F
are referred only to indicate that award of compound interest in
the instant case had neither any foundation in the record nor any
backing in law nor the Consumer Fora took care to examine the
contours of their jurisdiction and the requirements of proper
assessment, if at all any compensation and/or punitive damages
were sought to be granted. The impugned orders are difficult to G
be sustained. [Para 25][1148-F-H; 1149-A-C]
1.7 The State Commission merely referred to the decision
of COMPAT in Dr. Monga’s case and then referred to the prayer
of the respondent for award of compound interest coupled with
H
1096 SUPREME COURT REPORTS [2023] 5 S.C.R.

A the fact that possession cannot be handed over to her. On this
and with reference to the observations in the case of Malay Kumar
Ganguly’s case, for awarding compensation with such sum of
money as to put the wronged person in the position as he would
have been if he had not sustained the wrong, the State Commission
straightaway jumped to the conclusion of awarding compound
B
interest @ 14%. Apart from other shortcomings, the State
Commission, even while awarding compound interest @ 14%,
did not even take into account the fact of attempted refund of
money by the appellants by the cheque dated 08.11.2005 and did
not specify the period of such operation of compounding of
C interest. The open-ended and the assumptive order by the State
Commission had been bereft of logic and had been wanting in the
requisite reasoning as also specification of the relief sought to
be granted. The position in the National Commission had been
no better and in fact, the Commissions proceeded as if nothing
else was required to be considered because of Dr. Manjeet Kaur
D
Monga’s case. [Para 26][1149-D-G]
1.8 The impugned orders are required to be set aside.
However, as indicated, the pertinent factors are that Dr. Monga’s
case related to the very same project and very same builder with
similar grievance of the complainant. In the said case, award of
E compound interest until the date of attempted refund by the
builders has attained finality. In this view of the matter, even while
disapproving the proposition of providing compound interest as
such, it is deemed appropriate to take into consideration, only
for the purpose of the instant case, the other requirements of
F balancing the equities. [Para 27][1150-A-C]
1.9 When the amount payable by the appellants with
reference to the principles and propositions aforesaid is
calculated, it does not exceed the amount of Rs. 2,48,52,000/-
together with accrued interest, which has already been received
G by the respondent pursuant to the order passed by this Court on
09.05.2022. Keeping in view the peculiar circumstances of this
case, as an extraordinary measure, the respondent is allowed to
retain the amount so received. This relaxation for the respondent
is in no manner to be read as approval of the orders impugned or
approval of the proposition of awarding compound interest in
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1097
MERCHANT

these matters. Such a proposition of awarding compound interest A
in these matters by the Fora exercising jurisdiction under the
Act of 1986 is disapproved. [Para 27.2, 27.3][1150-G-H; 1151-B-
C]
1.10 The impugned orders passed by the State Commission
and National Commission are disapproved. Having regard to the B
peculiar circumstances of this case, the amount already received
by the respondent in the sum of Rs. 2,48,52,000/- together with
accrued interest is allowed to be retained by her but, it is made
clear that the appellants shall not be required to make any further
payment to the respondent, whether towards refund or towards
compensation or towards interest. [Para 28][1151-D] C
Dr. Manjeet Kaur Monga v. K.L. Suneja (2018) 14 SCC
679 : [2017] 6 SCR 453 – explained.
Ghaziabad Development Authority v. Balbir Singh
(2004) 5 SCC 65 : [2004] 3 SCR 68; Malay Kumar
Ganguly v. Sukumar Mukherjee (Dr.) [2009] CPJ 17 D
(SC); Central Bank of India v. Ravindra (2002) 1 SCC
367 : [2001] 4 Suppl. SCR 323; Clariant International
Ltd. and Anr. v. Securities & Exchange Board of India
(2004) 8 SCC 524 : [2004] 3 Suppl. SCR 843; Experion
Developers Pvt. Ltd. v. Sushma Ashok Shiroor (2022) E
SCC OnLine SC 416; NBCC (India) Ltd. v. Shri Ram
Trivedi (2021) 5 SCC 273; Ireo Grace Realtech Pvt.
Ltd. v. Abhishek Khanna and Ors. (2021) 3 SCC 241;
DLF Home Developers Limited and Anr. v. Capital
Greens Flat Buyers Association and Ors. (2021) 5 SCC
537; Arifur Rahman Khan and Ors v. DLF Southern F
Homes Pvt Ltd and Ors. (2020) 16 SCC 512 : [2020] 9
SCR 136; DLF Home Panchkula Pvt Ltd and Ors. v.
DS Dhanda and Ors. (2020) 16 SCC 318 : [2019] 7
SCR 1061; Manohar Lal (D) by Lrs. v. Ugrasen (D) by
Lrs. and Ors. (2010) 11 SCC 557:[2010] 7 SCR 346;
G
Sanjay Singh and Anr. v. U.P. Public Service
Commission, Allahabad and Anr. (2007) 3 SCC 720 :
[2007] 1 SCR 235; K.L. Suneja and Anr. v. Dr. (Mrs.)
Manjeet Kaur Monga (D) Through Her LRs and Anr
2023 SCC OnLine SC 91; Indian Council for Enviro–
Legal Action v. Union of India and Ors. (2011) 8 SCC H
1098 SUPREME COURT REPORTS [2023] 5 S.C.R.

A 161 : [2011] 9 SCR 146; Transmission Corp. of AP
Ltd. v. P. Surya Bhagavan (2003) 6 SCC 353; Balram
Prasad v. Kunal Saha (2014) 1 SCC 384 : [2013] 12
SCR 30 – referred to.
Wallersteiner v. Moir (No. 2) (1975) Q.B. 373 – referred to.
B Case Law Reference
[2004] 3 SCR 68 referred to Para 6.2
[2001] 4 Suppl. SCR 323 referred to Para 8.1
[2004] 3 Suppl. SCR 843 referred to Para 8.1
C
(2021) 5 SCC 273 referred to Para 8.2
(2021) 3 SCC 241 referred to Para 8.2
(2021) 5 SCC 537 referred to Para 8.2
[2020] 9 SCR 136 referred to Para 8.2
D
[2019] 7 SCR 1061 referred to Para 8.2
[2010] 7 SCR 346 referred to Para 8.4
[2007] 1 SCR 235 referred to Para 8.5
[2011] 9 SCR 146 referred to Para 9.3.1
E
(2003) 6 SCC 353 referred to Para 9.8
[2013] 12 SCR 30 referred to Para 9.8
[2017] 6 SCR 453 explained Para 15.2-19, 24,
26, 27
F
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.2892-
2894 of 2023.
From the Judgment and Order dated 31.03.2022 of the National
Consumers Disputes Redressal Commission, New Delhi in RP Nos.771,
G 772 and 773 of 2020.
Ranjit Kumar, Sr. Adv., Ajay Bhargava, Ms. Vanita Bhargava,
Arvind Ray, Karan Gupta, Ms. Vansha S. Suneja, M/s Khaitan & Co.,
Advs. for the Appellants.
Sidharth Luthra, Sr. Adv., Viksit Arora, Ms. Supriya Juneja, Aditya
H Singla, Ms. A. Sahitya Veena, Advs. for the Respondent.
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1099
MERCHANT

The Judgment of the Court was delivered by A
DINESH MAHESHWARI, J.
Table of Contents*
Preliminary and brief outline .............................................. 2
Relevant factual and background aspects ........................ 5 B
The State Commission awarding compound interest ... 11
Approval by the National Commission ........................... 17
Rival Contentions ............................................................... 19
Matters of form and pleading not relevant in the C
present case ........................................................................ 35
The cited decisions on award of interest in real
estate dealings .................................................................... 37
The decision in Manjeet Kaur Monga’s Case D
and its connotations ........................................................... 45
The complexities of present matter requiring
further exploration ............................................................. 57
In extraordinary measure, money received by E
respondent allowed to be retained .................................. 67
Conclusion ........................................................................... 69
Preliminary and brief outline
Leave granted. F

2. In these appeals by special leave, the appellants have essentially
questioned a part of the common judgment and order dated 31.03.2022,
as passed by the National Consumer Disputes Redressal Commission,
New Delhi1 in Revision Petition Nos. 771 of 2020, 772 of 2020 and 773
of 2020, whereby the National Commission has declined to interfere in G
the common judgment and order dated 12.03.2020, as passed by the
State Consumer Disputes Redressal Commission, Delhi2, in Appeal Nos.
121 of 2014, 122 of 2014 and 123 of 2014.
*Ed. Note : Pagination in the Table is as per the original judgment.
1
Hereinafter also referred to as ‘the National Commission’.
2
Hereinafter also referred to as ‘the State Commission’. H
1100 SUPREME COURT REPORTS [2023] 5 S.C.R.

A 2.1. The present set of appeals has its genesis in the three
complaints filed by the complainant-respondent before the Consumer
Disputes Redressal Forum-II, New Delhi3, bearing Nos. C-252 of 2006,
C-283 of 2006 and C-284 of 2006 alleging deficiency of service on the
part of the present appellants for having failed to deliver the possession
of three flats booked by her, even after expiry of the agreed period and
B
despite the fact that she had admittedly made payment of 60% of the
total sale consideration. The District Forum, in its order dated 20.12.2013,
dismissed the complaints so filed by the present respondent on various
grounds including that she had tried to avail of the services of the builder
for commercial purposes by booking three flats and thus, did not fall
C within the category of “consumer”, as defined under Section 2(d) of the
Consumer Protection Act, 19864.
2.2. In the said judgment and order dated 12.03.2020, the State
Commission, however, disapproved the order so passed by the District
Forum as regards the maintainability of complaints and then, particularly
D with reference to the decision in the case of Dr. Manjeet Kaur Monga
v. K.L. Suneja: (2018) 14 SCC 6795, wherein the award of compound
interest by Competition Appellate Tribunal6 under the Monopolies and
Restrictive Trade Practices Act, 19697 was not interfered with by this
Court, granted relief to the complainant in the manner that the appellants
shall refund the amount deposited by her together with ‘compound
E interest at the rate of 14% from the date of deposit’. The National
Commission rejected all the contentions urged on behalf of the appellant
against the order so passed by the State Commission and also found no
reason to interfere with the relief granted by the State Commission in
view of the decision of this Court in the case of Dr. Manjeet Kaur
F Monga (supra).
3. On 09.05.2022, while considering the petitions leading to these
appeals at the initial stage, this Court found the question of awarding
compound interest @ 14% on the refund of deposited amount requiring
consideration and hence, notice was issued to this limited extent. However,
G this Court also took note of the fact that a sum of Rs. 1,48,52,000/- had
3
Hereinafter also referred to as ‘the District Forum’.
4
Hereinafter also referred to as ‘the Act of 1986’.
5
Reference to this case has occurred at multiple places hereafter; where it has been
referred to as the case of ‘Dr. Manjeet Kaur Monga’ or the case of ‘Dr. Monga’.
6
‘COMPAT’, for short.
H 7
Hereinafteralso referred to as the ‘MRTP Act’.
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1101
MERCHANT [DINESH MAHESHWARI, J.]

been deposited by the appellants pursuant to an order earlier passed by A
the National Commission and, in the totality of circumstances, execution
of the orders impugned was stayed subject to the condition of the
petitioners-appellants depositing a further sum of Rs. 1 crore with the
District Forum within four weeks with liberty to the respondent to
withdraw the deposited amount with accrued interest. Such deposit and
B
withdrawal were, however, made subject to the final orders of this Court.
The order dated 09.05.2022 reads as under: -
“Having heard learned senior counsel for the respective
parties preliminarily and having examined the material placed on
record, in our view, only the question of awarding compound
interest at the rate of 14% on the refund of deposited amount is C
required to be considered in this matter.
Issue notice to the limited extent as above.
Ms. Supriya Juneja, learned counsel accepts notice on behalf
of the respondent No. 1. D
Counter affidavit may be filed within three weeks.
The petitioners shall have one week thereafter to file
rejoinder affidavit, if so chosen.
During the course of submissions, we have been informed
E
that pursuant to the order dated 11.11.2020, as passed by the
National Consumer Disputes Redressal Commission, the
petitioners had deposited an amount of Rs.1,48,52,000/- with the
President, District Consumer Disputes Redressal Forum-II, New
Delhi on 25.11.2020.
F
Learned senior counsel appearing for the petitioners submits
that as per his instructions, the said amount has been invested in a
fixed deposit.
Having regard to the circumstances of the case, it is
considered appropriate and hence provided in the interim that until
further orders of this Court, execution of the orders impugned G
shall remain stayed, subject to the condition that the petitioners
shall deposit further an amount of Rs. 1 crore with the said District
Consumer Disputes Redressal Forum within four weeks from
today.
H
1102 SUPREME COURT REPORTS [2023] 5 S.C.R.

A It shall be permissible for the respondent herein to withdraw
the entire deposited amount, including the earlier deposited amount
of Rs.1,48,52,000/- together with accrued interest.
This deposit by the petitioners and withdrawal by the
respondent shall remain subject to the final order to be passed in
B these petitions.
List these petitions in the second week of July, 2022.”
4. After completion of pleadings, and in view of a short point
involved, we have heard learned counsel for the parties finally at this
stage itself.
C
Relevant factual and background aspects
5. As noticed, the only question involved in these appeals is about
the legality and validity of the directions by the State Commission to the
appellants to refund the deposited amount to the respondent with
D compound interest. The relevant factual and background aspects, to the
extent relevant for the short question involved in the matter could be
noticed as follows:
5.1. The appellant No. 1 is said to have launched a residential
project namely Siddharth Shila Apartments at Plot No. 24, Vaishali,
Ghaziabad, Uttar Pradesh. The appellant No. 2, K.L. Suneja is said to
E
be the Director of the appellant No. 1. On 01.08.1989, the respondent, a
Non-Resident Indian, applied for allotment of three flats in the said project
and pursuant thereto, the appellant No. 1 issued allotment letter in her
favour, purportedly allotting three residential flats bearing Nos. C-601,
C-602 and C-603 admeasuring 1375 sq. ft. each (including common
F areas) for a consideration of Rs. 7,37,000/-, Rs, 7,35,625/- and Rs.
7,35,625/- respectively. The entire consideration was payable by the
respondent in 12 instalments. It has been the case of the appellants that
the respondent made payment up to 6th instalment but, defaulted thereafter
and did not make remaining payment despite numerous reminders.
G 5.2. On 15.10.2005, the respondent issued a notice to the appellants,
stating, inter alia, that even after 16 years, the appellants had kept the
allottees waiting despite having received more than 60% of the total
cost of the respective flats. It was also stated that she could make further
payment towards the remaining instalments but was having legal right to
know as to when the construction would be completed and the possession
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1103
MERCHANT [DINESH MAHESHWARI, J.]

would be handed over; and without disclosing such essential facts, A
retaining the deposited money amounted to deficiency in service in terms
of Section 2 of the Act of 1986. The respondent called upon the appellants
to furnish within 15 days a written undertaking supported by a progress
certificate from the architect concerned as to when the said flats would
be completed or else, she would be approaching the proper forum under
B
the relevant provisions of law against them. The relevant contents of
this notice read as under: -
“5) That it is further needless to mention here that an allottee like
my said clientess, who has already invested more than 60% of
the total cost of the respective flats, certainly can make further
payment towards the remaining instalments but at least the allottees C
at large are having legal rights to know as to when the said flats
will be completed and the possession be handed over to them, and
without disclosing the same from your side, and keeping the money
collected amounts to deficiency in service as per Section 2 of the
Consumer Protection Act for which my said clientess shall have D
right to invoke the jurisdiction of the competent forum.
6) That without prejudice to the above, my client is ready to make
the payment of balance instalments as per the statement of account
subject to the undertaking of proposed completion of the said flat
and further production of written progress certificate from the E
architect concerned of yours because my clientess shall not be
kept in dark for period not known to her within which she is going
to take possession of the flat.
7) That it is further to mention here that as per the various landmark
pronouncements of National Commission as well as State F
Commissions of various states, in the said facts and circumstances,
you are certainly liable to be prosecuted and also liable to the
damages and interest thereon.
In light of the above facts and circumstances, I do hereby call
upon you which I hereby do and call upon you, to furnish or produce G
a written undertaking supported by a progress/completion
certificate from your concerned architect within which the said
flats shall be completed, within a period of 15 days from the date
of the present legal notice, failing which I have clear instructions
from my said clientess to invoke the proper forum under the
relevant provisions of law against you. H
1104 SUPREME COURT REPORTS [2023] 5 S.C.R.

A Without prejudice to the above, my said clientess shall have other
legal rights against you as advised in law.”
5.3. In reply to the aforesaid notice, the appellants stated details
of payment made by the respondent and it was alleged that it had been
a matter only of provisional allotment and no agreement as such was
B executed between the parties; and the allotment had been cancelled due
to default on her part. After tabulating the payment made and the alleged
dues, it was also stated on behalf of the appellants that they were ready
to refund the amount by way of cheque but the respondent was seeking
refund in cash, which was unjustified. However, a cheque in the sum of
Rs. 10,68,031/- was sent towards refund with the said reply dated
C 08.11.2005 while stating, inter alia, as under: -
“2. From the aforesaid it will be apparent that not only did your
client not make the payments within time, but also failed to pay
the interest and thereafter stopped making any payments
whatsoever in spite of reminders. As in 2002 a sum of Rs
D 8,22,682.00 (Rupees Eight Lacs Twenty Two Thousand Six
Hundred Eighty Two only) was due from your Client and against
which your Client sent in early Feb. 2002 total sum of Rs 30,000/
- (Rupees Thirty Thousand only) and again in end of Feb. 2002 a
total sum of 45,000/- which was returned by my Clients since the
E allotment stood cancelled due your Client is aware of the allotment
having stood cancelled, at least since the year 2002 and the notice
now got sent is with ulterior motives. No payments as falsely
alleged were even tendered in January, 2004 or after Feb. 2002.
In last your Client pursuant to the cancellation of the allotment
wanted the refunds in terms of the provisional Allotment of the
F sum of Rs 10,68,031.00 (Rupees Ten Lacs sixty Eight Thousand
Thirty One) only in cash only which my Clients refused and offered
to pay the cheque for the said amount, however, your Client
pleaded with my Clients that they had not accounted for the
payments made to my Clients and as such could not take back the
G Cheque in refund and thus were demanding the case However
my Clients did not want to be privy to the illegal acts of your client
and refused to comply with the demand of your client to pay the
cash. It is for this reason that the notice has been issued on totally
wrong facts and demands.

H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1105
MERCHANT [DINESH MAHESHWARI, J.]

3. All the other contents of your notice are incorrect and are denied A
and my clients are along with this reply enclosing their Cheque
No. 357757 dated 07 November 2005 of Citibank NA New Delhi
for a sum of Rs 10,68,031.00 (Rupees Ten Lakhs Sixty Eight
Thousand Thirty One) only in favour of your client towards refund
of the amounts due to them under the Letter of Provisional
B
Allotment. Please further note that there never was any
Agreement between your Client and my Clients and in accordance
with the accepted practice or the trade your client had only made
a provisional booking when the project or my clients was at a
nascent stage and when there was no certainty and when no flats
were in existence. The said Provisional Allotment was to be C
converted into an Agreements to sell which as per the Law. Where
the property is situated is required to be registered upon payments
being made by your client and since your client did not comply
with the terms or the Provisional Booking no such Agreement
came into being and the client of your client after 3 years of the
D
date when at least they admit to have become aware of the
cancellation is also barred by time.
4. You are requested to advise your client accordingly and to refrain
from any mis-conceived litigation. Upon cancellation of the
Provisional allotment no flat has been reserved for your client and
no such flat is in existence. The mis-conceived litigation if any E
instituted by your client shall be defended by my Clients at the
cost and risk of your client.”
5.4. On 30.11.2005, a rejoinder was sent on behalf of the
respondent to the reply aforesaid, while returning the cheque and while
objecting to the conduct of the appellants, in the following words: - F

“I would like to bring to your notice that your client wrote
letter dated 26.11.2001 in respect of flat No.(1) C-601 to my
clientess whereby accepted receipt of Rs.4,43,501/- out of total
amount of Rs.7,08,458/-, (2) C-602, receipt of Rs.4,46,912/- out
of total amount of Rs.7,17,114.40 and (3) C-603, receipt of G
Rs.4,44,625/- out of total amount of Rs.7,32,147.50 and demanded
balance amounts of Rs.2,64,957/-, Rs.2,70,202.40 and
Rs.2,87,522.50 respectively. Photocopies of the aforesaid letters
are enclosed for your kind perusal. Thus more than 60% of the
total due amount has been paid by my clientess. Since there was H
1106 SUPREME COURT REPORTS [2023] 5 S.C.R.

A no progress in the construction of the above said flats on part of
your client, my clientess had no option but to stop the further
payment. The cancellation of allotment without show cause notice
to my clientess and even non intimation of cancellation order is
illegal and thus amounts to illegal malafide intention on part of
your client. However, my clientess is still ready to make balance
B
amount if the possession of the above said three flats are handed
over to my clientess.
It is wrong and denied that your client ever intimated the
stage of construction of the flats. My client had applied in the
year 1989 and after 16 years she is being told that her allotment
C has been cancelled.
My client has been cheated by your client with dishonest
intention and has misappropriated her hard money whereby causing
huge loss, mental agony to my clientess.
D The above said cheque is enclosed herewith and you are
requested to acknowledge its receipt.
I, therefore, through this rejoinder call upon you to advise
your client to immediately hand over the physical possession of
the above said flats failing which my clientess shall be constrained
E to initiate legal proceedings both civil and criminal before competent
court of law/forum and in that event your client shall be liable for
its cost, risk and consequences.”
5.5. After such exchange of communications, the respondent
appears to have filed a civil suit, which was dismissed for want of
F jurisdiction. Thereafter, she preferred the said complaints in the District
Forum. A copy of one such complaint has been placed on record and the
relief claimed therein could be usefully reproduced as under: -
“Therefore, in the facts and circumstances of the case the
Complainant most respectfully prays that this Hon’ble state Forum
may kindly be pleased.
G
(1) To direct the respondent to give possession of the flat C-
601 to the complainant within one month;
(2) To direct the opposite Parties to pay a sum of Rs. 14,00,000/
- (Fourteen lakh rupees only) as damages for the loss of
H rent and mental agony and also direct the respondent to
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1107
MERCHANT [DINESH MAHESHWARI, J.]

pay interest on 4,43,500/- @ of 18% per annum for 16 years A
i.e. Rs. 10,758,00/- i.e. total sum of Rs. 24,758,00/-
(3) To grant any other and further reliefs as may be deemed fit
and proper in the interest of justice.
(4) To award exemplary costs in favour of the Complainant
and against the respondent.” B

5.6. The District Forum, while taking the three complaint cases
together, proceeded to reject the same while observing, inter alia, as
under:-
“7. Apart from it, the Complainant is also guilty of concealment of C
the material fact from this Forum. OP has alleged that on the
same cause of action a case is pending before Civil Court at
Karkardooma Courts, Delhi and the Complainant has not denied
this fact. Moreover, complaint is also barred by limitation. The
Complainant is an NRI. She had invested her amount here in real
estate. The Complainant also filed two more complaints here D
alongwith this complaint therefore as rightly objected by the OP
that all such activities of the Complainant were made with a view
to earn profit by investing her money in real estate. Thus,
Complainant tried to avail of the services of the OP for commercial
purpose. Whereas, the provisions of Consumer Protection Act, E
1986 were made for the benefit of a Consumer. Thus, Complainant
does not fall within the category of consumer as defined under
section 2(d) of the Act. Therefore, taking the case of the
Complainant from any angle, we do not find any merit in her case
hence, we are constrained to dismiss the complaints. Copy of this
order be placed on all the files.” F
The State Commission awarding compound interest
6. The State Commission, however, did not agree with the
reasoning of the District Forum and held that the complaints made by
the respondent were maintainable in law. As noticed, those questions
G
relating to maintainability are not involved in these appeals and hence,
we need not dilate on the same.
6.1. The relevant aspect of the matter is that after having overruled
preliminary objections of the present appellants, the State Commission
observed that 60% of the total sale consideration was paid by the
H
1108 SUPREME COURT REPORTS [2023] 5 S.C.R.

A complainant-respondent; that possession of the flats booked by her was
not handed over even after expiry of the agreed period; that the
complainant, having opted for the construction-linked plan, was to make
payment of the balance amount on delivery of possession; and the
allegation of her being in default was to be rejected because, on inspection
of the site, construction was not found as per schedule. Having said so,
B
the State Commission proceeded to consider the question as to how the
complainant was to be compensated for the monetary loss, and mental
and physical harassment suffered at the hands of opposite parties because
of non-delivery of the allotted flats. The relevant observations of the
State Commission read as under: -
C “19. In these circumstances all the preliminary objections of the
OPs/respondents, since not maintainable are sequentially rejected.
Coming to the merit of the case, it is a fact that booking of three
flats was done. This is also indisputed that 60% of the total sale
consideration was paid to OPs. Possession of the flats so booked
D were not handed over although the agreed period was over. The
complainant having opted for the construction linked plan had to
pay the balance amount on the delivery of the possession of the
flats. But on inspection of the site the construction in the project
was not found as per schedule. Finally the objection of the OP to
the effect that the complainant was defaulter in making the payment
E cannot sustain since the complainant had opted for consideration
linked plan and she had to make the payment beyond 60% on
completion of the construction and thus this objection is also
overruled. In these circumstances the complaint deserves to be
accepted. Accordingly the orders passed by the District Forum
F dismissing the complaint since not sustainable are set aside.
20. Having arrived at the said conclusion, the point for consideration
is as to how the Complainants are to be compensated for the
monetary loss, mental and physical harassment he has suffered
at the hands of OPs on account of non-delivery of the allotted
G flat.”
6.2. The State Commission, thereafter, examined various
connotations of the term “compensation” and observed that the
Commission or the Forum was entitled to award not only value of goods
or services but also to compensate a consumer for injustice suffered by
H him. With reference to the decision in Ghaziabad Development
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1109
MERCHANT [DINESH MAHESHWARI, J.]

Authority v. Balbir Singh: (2004) 5 SCC 65, it was observed that this A
Court had indicated the factors to be kept in view while determining
adequate compensation; and in cases where possession was directed to
be delivered to the complainant, the compensation for harassment would
necessarily have to be less because that party was being compensated
by increase in the value of the property but, in cases where only money
B
was to be refunded, the party would be suffering a loss inasmuch as he
had deposited the money in the hope of getting a flat/plot and he was
deprived of the same, as also the benefit of price escalation. The State
Commission also observed that in such case (only of refund of money),
the complainant would suffer substantial loss on account of payment of
interest on the loans raised; depreciation in the money value; and C
escalation in the cost of construction etc. The State Commission also
observed that in these proceedings, necessary orders regarding refund
of the deposited amount could be passed, notwithstanding the proceedings
in any other forum. The relevant observations of the State Commission
read as under: -
D
“21. The provisions of the Act enable a consumer to claim and
empower the Commission/Forum to redress any injustice done to
a consumer. The Commission or the Forum is entitled to award
not only value of goods or services but also to compensate a
consumer for injustice suffered by him. The word compensation
is of very wide connotation. It may constitute actual loss or E
expected loss and may extend the compensation for physical,
mental or even emotional suffering, insult or injury or loss.
Therefore, for the purpose of determining the amount of
compensation, the Commission/Forum must determine the extent
of sufferance by the consumer due to action or inaction on the F
part of the Opposite Party. In Ghaziabad Development Authority
Vs. Balbir Singh – (2004) 5 SCC 65, while observing that the
power and duty to award compensation does not mean that
irrespective of facts of the case, compensation can be awarded
in all matters on a uniform basis, the Hon’ble Supreme Court
gave certain instances and indicated the factors, which could be G
kept in view while determining adequate compensation. One of
the illustrations given in the said decision was between the cases,
where possession of a booked/allotted property was directed to
be delivered and the cases where only monies paid as sale
consideration, are directed to be refunded. The Hon’ble Court H
1110 SUPREME COURT REPORTS [2023] 5 S.C.R.

A observed, in this behalf, that in cases where possession is directed
to be delivered to the Complainant, the compensation for
harassment will necessarily have to be less because in a way that
party is being compensated by increase in the value of the property
he is getting. But in cases where monies are being simply refunded,
then the party is suffering a loss inasmuch as he had deposited
B
the money in the hope of getting a flat/plot. He is not only deprived
of the flat/plot, he has been deprived of the benefit of escalation
of the price of the flat/plot. Additionally, in my view, in such a
situation, he also suffers substantial monetary loss on account of
payment of interest on the loans raised; depreciation in the money
C value and escalation in the cost of construction etc.
22. From the above it is apparent that this Commission can pass
orders regarding the refund of the amount deposited to the
company by the complainants, notwithstanding the proceedings
pending in any other forum.”
D 6.3. After the observations afore-stated, the State Commission
took note of a few decisions against the builders or the real estate
developers and on the rights of the allottee to decline possession at the
belated stage. Thereafter, the State Commission referred to the
contentions urged on behalf of the complainant on the point of
E compensation based on the decision of COMPAT in the case of Dr.
Manjeet Kaur Monga, which was affirmed by this Court. In paragraph
29 of the judgement, the State Commission presented its observations as
also extractions from the said decision of COMPAT in the following
manner: -

F “29. The ld. Counsel for the appellant while arguing on the point
of compensation has submitted that the case under consideration
is on the facts of Manjit Kaur Monga versus K.L. Suneja and ors
decided by the Hon’ble COMPAT and upheld by the Hon’ble
Supreme Court of India in the matter of Manjit Kaur (Supra)-
(2018) 14 SCC 679 holding as under:-
G
“36…. It is clear that the respondents had made a false
representation to the general public including Smt.
Gursharan Kaur about the time within which the project
was to be completed i.e. three years but did not complete
the construction for more than one decade. Therefore, there
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1111
MERCHANT [DINESH MAHESHWARI, J.]

is no escape from the conclusion that they are guilty of A
unfair trade practice as defined under Section 36-
A(1)(i)(ii) and (ix) of the Act.
37. The cancellation of allotment made in favour of the
complaint deserves to be declared as wholly arbitrary,
illegal and capricious. It is not in dispute that Smt. B
Gursharan Kaur amount. The complainant, Dr. (Mrs.)
Manjeet Kaur Monga deposited three other instalments.
She did not despite further instalments because the
respondents did not complete the construction within the
stipulated time. For the first time a vague statement about
the construction was made in letter dated 26.12.2001, which C
was issued after 12 years of the booking. Even thereafter
the respondents did not disclose the stage-wise progress
in the construction work and, as mentioned above, they
deliberately misconstrued the complaint’s protest dated
22.05.2002 as her disinclination to take the flat. D
…..Therefore, it must be held that the complainant was
justified in not paying further instalments of price and the
respondent committed grave illegality by cancelling the
allotment.”
The quantum of compensation as has been decreed in the E
aforementioned judgement of the Hon’ble COMPAT and
also upheld by the Hon’ble Supreme Court of India
stipulates a fair, just, equitable and reasonable award. The
respondent has unscrupulously deprived the appellant of
the due benefit of escalation in property prices since 1989
till date and therefore, in order to put the appellant in the F
same place and deny the benefit of his own illegality to the
respondent this Hon’ble Court ought to compensate the
appellant in terms of the prevailing market value of the
property in question.
In conclusion, the appellant seeks the return of the G
instalments paid by her to the respondent plus compound
interest @ 15% p.a. from the date of actual refund, in
addition to damages quantified at Rs. 14,00,000/- for
mental agony and expenses incurred in protracted
litigation.” H
1112 SUPREME COURT REPORTS [2023] 5 S.C.R.

A 6.3.1. We are constrained to observe, in regard to the above-
quoted part of the judgment of the State Commission that in the said
paragraph 29, the State Commission purportedly extracted a few parts
of paragraphs 36 and 37 of the decision of COMPAT in the case of Dr.
Manjeet Kaur Monga but then, placed two more passages as if being
the part of extractions, though the said two passages had obviously been
B
the part of submissions of the complainant where for the first time, the
claim of compound interest @ 15% p.a. occurred in this case. Although,
such a presentation in the judgment dated 12.03.2020 of the State
Commission (as appearing in the copy of judgment placed before us –
pp. 166-167 of the paper book) seems to be that of a typographical/
C clerical error but, we have reproduced the same verbatim, for being
relevant for the present purpose.
6.4. After the observations foregoing, the State Commission found
the case of the present complainant akin to that of Dr. Manjeet Kaur
Monga; and when the units in question had already been sold, found it
D just and proper to direct the present appellants to refund the deposited
amount together with compound interest @ 14% from the date of deposit.
This, according to the State Commission, was in line of the decision of
this Court in Malay Kumar Ganguly v. Sukumar Mukherjee (Dr.):
[2009] CPJ 17 (SC). The State Commission observed and directed as
under: -
E
“30. In fact reliance of the judgement referred to in the preceding
paragraph against the same Ops, would be apt and best suited
since against the same builder and involving similar facts In the
facts and circumstances of the case, the possession of the unit
having already been sold, is not possible to be handed over putting
F the complainant to a position where she had nothing to fall back
upon, the Ops/respondents are directed to refund relying on the
judgement in the matter of Manjit Kaur Monga versus K.L. Suneja
and ors (Supra) decided by the hon’ble Compat and upheld by the
Hon’ble Supreme Court of India, the deposited amount plus
G compound interest at the rate of 14% from the date of deposit.
This would be in line with the principles set out by the Hon’ble
Supreme Court of India, in the matter of Malay Kumar Gangully
versus Sukumar Mukherjee (Dr.) as reported in III [2009] CPJ
17 (SC) providing that a person is entitled to damages/
compensation as nearly as possible sum of money which would
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1113
MERCHANT [DINESH MAHESHWARI, J.]

have been if he had not sustained the wrong. This would meet the A
ends of justice.
31. Ordered accordingly leaving the parties to bear the cost.
32. FA-122/2014 and FA-123/2014 being on the same lines bearing
the same facts and on the common point of law are also disposed
of accordingly with directions to the Ops as contained in para 30 B
of this order.”
Approval by the National Commission
7. In the revision petitions preferred by the appellants against the
judgment and order dated 12.03.2020 so passed by the State Commission, C
the National Commission, after rejecting other contentions of the
appellants, found that the facts of Dr. Manjeet Kaur Monga’s case
were almost identical in relation to the flats booked by the respondent in
the same project of the appellants. The National Commission took note
of the observations of this Court in Dr. Monga’s case and rejected the
contentions of the appellant in seeking to avoid the application of the D
said decision, inter alia, in the following words: -
“32. From the bare reading of this provision, it is clear that the
proceedings continuing under MRTP Act before its repeal had
been saved under Section 66(1)(A). The argument of learned
counsel for the Opposite Party that the order of Dr. Manjeet Kaur E
Monga’s case (supra) had been passed under a repealed Act and
therefore is not applicable in this case, has no force and that the
argument is totally misconceived and misdirected. Also, the order
in Dr. Monga’s case (supra) was passed in the year 2015 after
the repeal of MRTP Act which was challenged before the Hon’ble F
Supreme Court and the Hon’ble Supreme Court passed its order
in 2018. Therefore, it is clear that the order of Dr. Manjeet Kaur
Monga’s case (supra) was pronounced after the repeal of the
MRTP Act and not during the existence of the MRTP Act.
33. There is no dispute that the facts of the Monga’s case (supra)
G
and the present case are identical as the flats were booked in the
same project of the Petitioner, although by different allottees and
that in both the cases, despite payment of the money, the allotted
flats were not given to its allottees within the stipulated period or
even thereafter. In the present case, the flats had been sold during
the pendency of the Complaint. The Opposite Party, therefore, is H
1114 SUPREME COURT REPORTS [2023] 5 S.C.R.

A not in a position to hand over the possession of the said flats to the
Complainant and the Commission is fully empowered to grant
any other relief which is just and proper in such circumstances. It
is also settled proposition of law that the Commissions are bound
to follow the dictum of the superior Foras on the identical facts.
In the present case, on the identical facts there is a judgment of
B
Hon’ble Supreme Court, although the remedy had been sought in
that case under a different provision of the Act, however, the
findings are on the identical facts of the case and so the order is
binding on the Foras below….”
7.1. After reproducing certain passages from the decision of this
C Court in Dr. Manjeet Kaur Monga (supra), the National Commission
concluded on the matter by dismissing the revision petitions in the
following terms: -
“34. It is also apparent that the Complainant has specifically argued
before the State Commission and also mentioned this fact in her
D written submissions that they should be awarded the same relief
as had been granted in Dr. Monga’s case (supra) and that this
contention was not opposed by the Opposite Party before the
State Commission.
35. This Commission has a limited revisional jurisdiction. It can
E set aside the impugned order in exercise of its revisional jurisdiction
only when the findings are perverse or without jurisdiction.
36. From above discussion it is clear that in this case, the State
Commission had duly followed the dictum of the Hon’ble Supreme
Court in Dr. Manjeet Kaur Monga’s case (supra) and therefore,
F it cannot be said that the findings of the State Commission are
perverse or without jurisdiction. We found no illegality or infirmity
in the impugned order. The present Revision Petitions have no
merit and the same are dismissed.”
Rival Contentions
G
8. While assailing the orders aforesaid, awarding compound interest
to the respondent, learned senior counsel Mr. Ranjit Kumar appearing
on behalf of the appellants has put forward six-fold submissions which
could be summarised as follows:

H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1115
MERCHANT [DINESH MAHESHWARI, J.]

8.1. Learned senior counsel has contended in the first place that A
the Act of 1986 does not confer any power on the Consumer Fora
established thereunder to award compound interest on the compensation
amount; and for being not envisaged under or by the scheme of the Act
of 1986 and being not provided in the contract either, such awarding of
compound interest cannot be countenanced. Learned senior counsel has
B
submitted that wherever the legislature intended to confer the power to
grant compound interest, an enabling provision has been incorporated in
the statute. In this regard, the learned counsel has given several examples,
like Section 16 of the Micro, Small and Medium Enterprises Development
Act, 2006; Section 5 of the Interest on Delayed Payments to Small Scale
and Ancillary Industrial Undertakings Act, 1993; Section 23 of the Trusts C
Act, 1882; Section 8 of the Payment of Gratuity Act, 1972; Section 7 of
the Public Premises (Eviction of Unauthorised Occupants) Amendment
Act, 2015; and Section 3 of the Usurious Loans Act, 1918. Learned
counsel has cited the decision of this Court in the case of Central Bank
of India v. Ravindra: (2002) 1 SCC 367 in support of the submissions
D
that with the contract not providing so, compound interest could not have
been awarded. It has also been contended that in the absence of any
agreement or any statutory provision or mercantile usage, interest payable
could only be at the market rate and could never be compounded at
whopping 14%. Learned counsel has also relied upon the decision in
Clariant International Ltd. and Anr. v. Securities & Exchange Board E
of India: (2004) 8 SCC 524.
8.2. In the second limb of submissions, learned senior counsel for
the appellants has contended that in the recent decisions, this Court has
only awarded simple interest with the rates ranging from 6% to 9% p.a.
in the cases of deficiency of service by the builders. In this regard, F
learned counsel has referred to the rate of interest awarded in Experion
Developers Pvt. Ltd. v. Sushma Ashok Shiroor: (2022) SCC OnLine
SC 416; NBCC (India) Ltd. v. Shri Ram Trivedi: (2021) 5 SCC
273; Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna and Ors.:
(2021) 3 SCC 241; DLF Home Developers Limited and Anr. v.
Capital Greens Flat Buyers Association and Ors.: (2021) 5 SCC G
537; Arifur Rahman Khan and Ors v. DLF Southern Homes Pvt
Ltd and Ors.: (2020) 16 SCC 512 and DLF Home Panchkula Pvt
Ltd and Ors. v. DS Dhanda and Ors.: (2020) 16 SCC 318. The
learned counsel has particularly referred to the passage in the case of
Ireo Grace Realtech (supra) wherein, the prayer for compound interest H
1116 SUPREME COURT REPORTS [2023] 5 S.C.R.

A @ 20% was rejected, for having no nexus with the commercial realities
of the prevailing market. Learned counsel would submit that in the face
of such decisions, taking even the highest interest rate at 9% p.a., the
total amount with interest payable to the respondent on 09.05.2022 (the
date of issuance of notice by this Court) would be Rs. 49,87,129/- whereas
the respondent has already withdrawn a sum of Rs. 2,55,95,119/-, which
B
was deposited by the appellants pursuant to the directions of the National
Commission and then by this Court, alongwith accrued interest. It has
been submitted that the amount so received by the respondent would be
approximately equal to the principal amount together with simple interest
@ over 60% p.a., calculated from the year 1989 to the month of June,
C 2022.
8.3. Learned senior counsel has contended in the third limb of
submissions that the directions as issued in the present matter would
result in unjust enrichment of the respondent inasmuch as the present
value of the award would be around Rs. 7.35 crore and that would be
D approximately 4.5 times the cost of all the three flats taken together
today as per the current market rate. Pertinently, the learned senior
counsel would submit, the respondent had, until the time of cancellation,
paid only a sum of Rs. 13.35 lakhs for all the three flats which was only
25% of the final price that would have been payable at the time of taking
possession. In this regard, it has also been argued that even with reference
E to the decision in Ghaziabad Development Authority (supra), the
compensation to be awarded to the respondent cannot exceed the fair
market value of the flats and as per the circle rates, it would be around
Rs. 2.04 crore and even as per the precedents of sale transactions, the
amount could at the most be Rs. 2.25 crore as per the average sale price
F based on 10 sale precedents in the same building and for the flats of
similar size. In any case, the amount of compensation on the basis of
present market realities would be much lower as compared to the
compensation quantified on the basis of compound interest @ 14%.
8.4. In the fourth limb of submissions, learned senior counsel for
G the appellants has argued that in the present case, the respondent had
neither demanded nor prayed for the relief of compound interest in the
complaints filed before the District Forum; and with reference to the
decision of this Court in the case of Manohar Lal (D) by Lrs. v. Ugrasen
(D) by Lrs. and Ors.: (2010) 11 SCC 557, it has been contended that
the Consumer Fora could not have granted relief which had not been
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1117
MERCHANT [DINESH MAHESHWARI, J.]

specifically prayed for. Further to this, learned counsel has also contended A
that in the present case, there had not been any finding by the State
Commission or the National Commission as regards the alleged loss or
injury suffered by the respondent. Although, the respondent pleaded loss
of rent but no evidence was brought on the record on this issue nor had
it been the case of the respondent that she was staying in a rented
B
accommodation or that she had availed loan for purchasing the flats and
was making payment of instalments to the lender. It has, thus, been
argued that without any pleading, without any evidence, and without any
finding on any loss or injury, the State Commission proceeded to direct
the refund of deposited amount with compound interest @ 14%, which
remains wholly unjustified. C
8.5. Fifthly, learned senior counsel for the appellants has referred
to the decision of this Court in the case of Dr. Manjeet Kaur Monga
(supra) in detail and has contended that therein, the only argument before
this Court was as to whether the Tribunal under MRTP Act was required
to determine the specific amount towards compensation as envisaged D
by Section 12-B thereof and the observations in paragraph 5 of the
decision, this Court did not interfere with the award of compound interest
in that context. The learned counsel has referred to a 3-Judge Bench
decision of this Court in the case of Sanjay Singh and Anr. v. U.P.
Public Service Commission, Allahabad and Anr.: (2007) 3 SCC 720
to submit that it is the ratio decidendi of a judgment and not the final E
order therein which form a precedent and, therefore, Dr. Monga’s case
cannot be considered to be a binding precedent so far as the proposition
with respect to compound interest is concerned.
8.6. In the sixth fold of submissions, essentially being in the
alternative, the learned senior counsel has submitted that even in Dr. F
Manjeet Kaur Monga’s case (supra), this Court upheld the directions
for refund with compound interest only until the date of refund post-
cancellation, which came to Rs.31,87,131/- and which, at the relevant
time, was also the approximate market value of the said flat. In this
regard, learned counsel for the appellants has also referred to the G
subsequent decision in Dr. Manjeet Kaur Monga’s case by this Court
in K.L. Suneja and Anr. v. Dr. (Mrs.) Manjeet Kaur Monga (D)
Through Her LRs and Anr: 2023 SCC OnLine SC 91. It has, thus,
been contended that the impugned orders, which direct a refund of the
principal amount together with compound interest @ 14% without even
H
1118 SUPREME COURT REPORTS [2023] 5 S.C.R.

A specifying the period for which it would be payable, are required to be
interfered with by this Court. While elaborating on this line of submissions,
learned counsel has submitted that in the present case, the appellants
had refunded the entire amount (after deducting the earnest money
deposited by the respondent) through the cheque dated 07.11.2005 for
an amount of Rs. 10,68,031/- and hence, assuming without admitting the
B
liability towards compound interest at the rate awarded by the State
Commission, the total amount payable until 08.11.2005 would be Rs.
84,76,540/- and not beyond. Learned counsel would submit that awarding
of compound interest without taking note of the facts of refund cheque
issued by the appellants remains wholly unjustified.
C 9. On the other hand, learned senior counsel for the complainant-
respondent Mr. Sidharth Luthra has duly supported the proposition of
awarding compound interest in this case and has strenuously countered
the submissions made on behalf of the appellants.
9.1. With reference to the background aspects, learned senior
D counsel has submitted that the respondent purchased 3 flats from the
appellants in the year 1989 when she was 39 years of age in anticipation
of moving to India and staying together with her daughters; and the
appellants promised to complete the construction and deliver the flats
within 36 months i.e., by the year 1992 and thus induced the respondent
E to pay 60% of the consideration amount in a construction-linked payment
plan by 1994. However, fact of the matter had been that there was no
construction on the ground until about the years 2003-2005 and, thereafter,
the appellants fraudulently sold the same flats to a third party without
even intimating the alleged cancellation to the respondent. Learned
counsel would submit that the appellants have failed to bring on record
F any cancellation letter pertaining to the said 3 flats and on the contrary,
they have made inconsistent statements about the date of cancellation
while sometimes alleging that cancellation was in the year 2002 whereas
stating before the National Commission that the cancellation was on
25.04.2005. Thus, it has been contended that the appellants had neither
G been fair in their dealings nor consistent in their stand.
9.2. While placing strong reliance on the decision of this Court in
Dr. Manjit Kaur Monga (supra), learned senior counsel has submitted
that the said case relating to the same project and the same builder (the
appellants) makes it clear that the appellants had duped the respective
H complainants by employing almost the same modus operandi. Learned
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1119
MERCHANT [DINESH MAHESHWARI, J.]

counsel would submit that as regards claim for compensation, the A
respondent’s case stands on a better footing than the case of Dr. Monga
inasmuch as in the said case, the appellants had cancelled the allotment
by a letter dated 30.04.2005 whereas no such cancellation letter is on
record in the present case and in fact, the appellants stated about the
alleged cancellation only in their reply dated 08.11.2005 to the notice
B
served by the respondent on 15.10.2005. This is coupled with the fact
that the respondent had made payments of Rs. 30,000/-, Rs. 45,000/-
and Rs. 75,000/-, respectively on 09.02.2002, 20.02.2002 and 25.01.2004,
which shows that she was keenly interested in purchasing the flats for
her private use.
9.2.1. Learned counsel has further submitted that while both, the C
respondent and the said Dr. Manjit Kaur Monga, were duped by the
appellants and resultantly both sought possession of their respective flats,
the respondent invoked jurisdiction under the Act of 1986 whereas the
said complainant approached COMPAT under the MRTP Act. Both the
fora had concurrent jurisdiction as regards unfair trade practice, though D
the respondent also complained of deficiency of service. Learned counsel
has referred to the provisions contained in Section 12-B(3) of the MRTP
Act and Section 14(1)(d) of the Act of 1986 and has submitted that the
provisions are in essence identical, empowering the respective fora to
award compensation though, the power to award compensation under
the Act of 1986 is wider in scope. E

9.2.2. Learned senior counsel has further submitted that in Dr.
Monga’s case, this Court has affirmed the measure of compensation
for an identically placed complainant by refund of deposit together with
15% p.a. compound interest from the date of deposit till the date of
return. Learned counsel has recounted the factors constituting rationale F
in awarding such compound interest in Dr. Manjit Kaur Monga’s case,
including those of extraordinarily long harassment; deprivation of flat;
inordinate delay of construction; illegal retention of deposit; and then,
compulsion to pursue protracted litigation. Learned counsel would submit
that the respondent had been subjected to rather excessive harassment G
for about 34 years and presently at the age of 73 years, she is required
to pursue this litigation. Further, in Dr. Manjit Kaur Monga’s case, the
deposits were retained by the appellants for about 12 to 15 years whereas
in the case of the respondent, the deposits were illegally retained and
utilized by the appellants for 29 to 34 years. Thus, according to the learned
H
1120 SUPREME COURT REPORTS [2023] 5 S.C.R.

A counsel, the award of compound interest to the respondent does not call
for any interference.
9.3. Learned senior counsel has further cited the decision in
Wallersteiner v. Moir (No. 2): (1975) Q.B. 373 to highlight the
principles therein that compound interest (i.e. interest with yearly rests
B in case no other frequency of rests is specified) should be awarded
under the equitable jurisdiction of the Court where the wrongdoer utilizes
the money retained for business purpose and thereby making the profit
thereon. Equally, it should be presumed that the wronged person would
have made the most beneficial use of the money, had it not been deprived
of it. It was further held that the ‘justification for charging compound
C interest normally lies in the fact that profits earned in trade would
likely be used as working capital for earning further profits’ and
that the ‘application of this rule is not confined to cases in which a
trustee or agent has misapplied trust funds or a principal’s property,
nor is it confined to trustees and agents.’
D 9.3.1. In regard to the principles surrounding and governing the
award of compound interest, learned senior counsel has also made
elaborate reference to the decision of this Court in the case of Indian
Council for Enviro-Legal Action v. Union of India and Ors.: (2011)
8 SCC 161.
E 9.4. Learned senior counsel has further contended that the
argument on behalf of the appellants that the compound interest could
only be awarded if provided for in the statute remains baseless inasmuch
as the Act of 1986 provides for an award for compensating the consumer
for any loss or injury including punitive damages; and there are no fetters
F on the way in which such an award may be expressed. According to the
learned counsel, this view has been affirmed by this Court in Dr. Monga’s
case, wherein an award expressed in terms of compound interest has
been held to be falling within the definition of “compensation.” Secondly,
this Court has held that ‘the inherent powers in the Court and
principles of justice and equity are sufficient to enable an order
G directing payment of compound interest; rather, the power to order
compound interest as part of restitution cannot be disputed,
otherwise there could never be restitution.’
9.5. Learned senior counsel for the respondent has further
contended that reliance on behalf of the appellants on certain decisions
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1121
MERCHANT [DINESH MAHESHWARI, J.]

of this Court awarding simple interest was wholly misplaced for the A
noteworthy distinction in the facts of all such cases and the present case
that such cases dealt with delayed possession of flats by the builder as
opposed to denial of possession altogether. Learned counsel has
underscored the submission that in case compensation is awarded in
addition to the possession of the property itself, the consumer is not
B
deprived of the escalation in property prices and thus, an award in terms
of simple interest may be suitable, on the given set of facts. Secondly,
none of the cases cited by the appellants deal with an exceptionally long
period of illegal retention of consideration by the builder i.e., 29-34 years.
It is undeniable that the property prices escalate exponentially over such
long period of over three decades and thus , any award must correlate to C
the economic realities of real-estate price escalation, as well as the
enormous unjust enrichment of the builder.
9.6. Learned counsel has submitted that in the present case, the
appellants have illegally retained and utilized the payments made by the
respondents for a period of 29-34 years and made huge profits thereupon D
in real-estate projects. In the event the appellants availed such amounts
for its business purpose from a bank, even at the most conservative
rates [15.95% p.a. compound interest], they would have to repay a sum
of Rs. 17.52 crore. Thus, the appellants at least made this profit by
utilizing the payments made by the respondent leading to unjust
enrichment. It is submitted that during the period 1989-1994 when the E
appellants collected funds from the respondent, lending rates were
historically at an all-time high (about 20% p.a. in 1991) and therefore,
the modus operandi of the appellants in collecting ‘free capital’ from
innocent home buyers without any intent of delivering on their promise,
deserves to be disapproved with award of penal damages. F
9.6.1. Learned senior counsel has further submitted that the
respondent has made investment in real-estate and not in any other sector;
and most conservative measure of escalation of real estate prices is
provided by comparing circle rates determined by the Government
authorities. In 1989, the circle rate for real estate in Sector 4, Vaishali, G
Ghaziabad was Rs. 850/sq. mtr. whereas, since 2016, this circle rate
escalated to Rs. 74,200/sq. mtr. Thus, property prices in Sector 4,
Vaishali, Ghaziabad have risen exponentially since 1989, at least by a
multiple of 87.3 times. According to learned counsel, another way of
mathematically expressing the same escalation in property prices, other
H
1122 SUPREME COURT REPORTS [2023] 5 S.C.R.

A than by way of a multiple, is by way of computing a rate of compounding
and as such, it is equivalent to say that property prices in the area in
question have escalated at a compound rate of 15% p.a. from 1989 for
the next 32 years.
9.6.2. Learned senior counsel has further argued that the contention
B on the part of the appellants with reference to simple rate of interest and
disputing the reliance on circle rate is also misleading for the reason that
in the year 1989, no circle rates of flats were available. Thus, the
respondent has used the then circle rate for land and the present circle
rate for land for the purpose of drawing an “apples-to-apples” comparison.
To arrive at a more accurate present value of the 3 flats, the respondent
C has bifurcated the admitted purchase price in 1989 into land and building
components, in terms of the allotment letter and thereafter, the building
component is escalated in terms of the CPWD cost index and the land
component is escalated in terms of the increase in circle rate for land.
Thus, according to the learned counsel, the present value of 3 flats has
D rightly been arrived at Rs. 9.06 crore.
9.6.3. In regard to such value indicators, it has also been submitted
on behalf of the respondent that undervaluing of transaction was that of
common knowledge and this apart, value of the project has depreciated
over the decades due to factors such as deterioration of the property
E upon usage, depression in rates due to multiple litigations etc. Thus, the
respondent has rightly placed on record the present cost of alternative 3
flats at about Rs 6.48 crore and has computed the loss of rent for 31
years at Rs 1.94 crore. Viewed from any angle, according to learned
senior counsel, the amount receivable under the orders impugned remains
the minimum towards entitlement of the respondent.
F
9.7. As regards the alternative submission of limiting the award of
compound interest until the year 2005 in terms of Dr. Monga’s case, the
learned senior counsel has submitted that the said proposition remains
inapplicable to the present case for the reason that initial refund of money
in Dr. Monga’s case was by way of a pay order and thus, the appellants
G did not utilize or retain the money after 30.04.2005 whereas in the present
case, they merely attempted to send a cheque with the reply dated
08.11.2005 which was never encashed and was promptly returned by
the respondent with rejoinder dated 30.11.2005 and such returned cheque
was duly accepted by the appellants. In regard to the later decision in
H the case of K.L. Suneja v. Dr. (Mrs.) Manjeet Kaur Monga (supra), it
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1123
MERCHANT [DINESH MAHESHWARI, J.]

has also been submitted that the appellants rather conceded before this A
Court that in case money was lying in their account, they would be liable
to pay compound interest @ 15% p.a. until the money was paid by
them. It has been submitted that, in the present case, money was debited
from the appellants’ account for the first time only on 25.11.2020 when
they deposited 25% of the award amount pursuant to the direction of the
B
National Commission. Even if they have made further payment according
to the order of this Court to the tune of Rs. 1 crore, compound interest
must run on the remainder of the portion of the award amount, which
the appellants have continued to retain and enjoy.
9.8. It has, therefore, been contended that the facts of the present
case are more egregious than the facts of the Dr. Monga’s case and in C
the overall circumstances, it would be appropriate and just to determine
the compensation in keeping with the formula for measure of such
compensation adopted in Dr. Monga’s case in order to avoid unequal
treatment to the respondent. It has also been submitted that in fact the
appellants did not argue against the award of compound interest before D
the State Commission and thus, their challenge ought not be considered
under Article 136 of the Constitution of India, for such an argument
having been consciously given up by them. The decision of this Court in
the case of Transmission Corp. of AP Ltd. v. P. Surya Bhagavan:
(2003) 6 SCC 353 has been referred to in this regard. It has also been
argued in reference to the decision in Balram Prasad v. Kunal Saha: E
(2014) 1 SCC 384 that while awarding just compensation, merely the
form of claim made by the complainant may not be considered decisive.
10. In rejoinder submissions, the learned senior counsel for the
appellants has contended that the decision in Dr. Manjeet Kaur Monga
cannot be read as an authority for the proposition that compound interest F
is invariably to be granted in all these cases. Learned counsel has also
submitted that the decision in the case of Indian Council for Enviro-
Legal Action (supra) is also not applicable as the compound interest
therein was awarded on the unique facts of that case and where the
mandate of this Court was circumvented for more than a decade. G
Learned counsel has also submitted that the judicial precedents of English
Courts cannot be applied to the present case, in view of specific law in
India that compound interest would be operated only if the statute or the
contract provides for the same; and there being no such prescription in
the statute or in the contract, awarding of compound interest cannot be
said to be justified. H
1124 SUPREME COURT REPORTS [2023] 5 S.C.R.

A 11. We have given our anxious consideration to the rival submissions
and have examined the record with reference to the law applicable.
Matters of form and pleading not relevant in the present
case
12. As noticed, in these appeals, a wide variety of rival submissions
B have been presented before us on the question as to whether the
Consumer Fora had been justified in awarding and approving compound
interest at the rate of 14%. While dealing with these submissions, we
may observe at the outset that, in our view, neither the submissions on
behalf of the appellants about want of pleading and prayer for compound
C interest nor the submissions on behalf of the respondent, about want of
opposition before the State Commission by the present appellants, deserve
much dilation. In this regard, it may be observed that in the complaint
case as originally filed, the respondent did not make any prayer for award
of compound interest; rather her prayer had essentially been for directions
to the appellants to deliver the flats and to award damages. If at all, the
D respondent claimed simple interest @ 18% p.a. It appears that such a
submission seeking compound interest was properly made, with reference
to the decision in Dr. Manjeet Kaur Monga’s case (supra), for the first
time by the claimant-respondent only before the State Commission. As
noticed hereinbefore, the State Commission, while reproducing two
E passages from the decision of COMPAT, further reproduced a part of
written submissions of the claimant-respondent claiming compound
interest. The State Commission did not elaborate much on the principles
governing its powers and those governing awarding compound interest;
and rather considered the decision in Dr. Monga’s case to be decisive
of the matter. In the revision petitions before the National Commission,
F the appellants seriously contested the applicability of the decision in Dr.
Monga’s case to the facts of the present case, albeit on a different
ground that the decision rendered in the proceedings under MRTP Act
cannot be applied to the present proceedings under the Act of 1986.
12.1. We shall be dealing with the relevant aspects concerning
G applicability of Dr. Monga’s case a little later but suffice it would be to
observe that in the given set of circumstances, the respondent does not
appear justified in suggesting that the appellants had consciously given
up their contest to the claim of compound interest. The other side of the
matter is that looking to the prayers in the complaints, the complainant-
H respondent could not have been denied the proper relief, if available on
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1125
MERCHANT [DINESH MAHESHWARI, J.]

the facts of the case and permissible on the applicable legal principles. A
Thus, the contentions as regards the matter of form and pleading are left
at that and without further discussion on the decision cited on behalf of
the appellant in the case of Manohar Lal (supra) as also the decisions
cited on behalf to the respondent in the cases of Transmission Corp. of
AP Ltd. and Balram Prasad (supra).
B
The cited decisions on award of interest in real estate
dealings
13. Reverting to the rival submissions concerning the question as
to whether the Consumer Fora had been justified in awarding and
approving compound interest at the rate of 14% and a vast variety of C
alternative methods for computing damages with reference to the loss
said to have been suffered by the respondent and the punitive measures
against the appellants, as noticed, strong reliance has been placed by the
State Commission and the National Commission as also by the respondent
on the decision in Dr. Manjeet Kaur Monga (supra), which arose out
of the case for compensation under the provisions of MRTP Act. The D
main plank, rather substratum, of the decision of State Commission in
awarding compound interest had been the view taken and relief granted
against the appellants in relation to the very same project and in relation
to a similar grievance of the said other prospective buyer, Dr. Monga,
who was also deprived of the fruits of her deposits. E
14. However, before adverting to the decision in the case of Dr.
Manjeet Kaur Monga (supra) in necessary details, we may usefully
refer to the other decisions cited on behalf of the appellants in support of
the contention that usually in such matters against the builders, this Court
has awarded simple interest in the range of 6% to 9% p.a., which has F
been countered on behalf of the respondent that the said decisions more
or less related to the cases of delayed delivery of possession and not
deprivation of flat altogether and retention of money for over three
decades.
14.1. In the case of DLF Homes Panchkula Pvt Ltd (supra), G
the facts- sheet indicates the features of delay in delivery of possession
and grant of compensation for such delay by way of interest as also a
lump sum and therein, this Court observed that there cannot be multiple
heads to grant damages and interest when the parties had agreed to
payment of damages in a particular manner. In the given context, this
Court, inter alia, observed as under: H
1126 SUPREME COURT REPORTS [2023] 5 S.C.R.

A “15. The District Forum under the Consumer Protection Act, 1986
(“the 1986 Act”) is empowered inter alia to order the opposite
party to pay such amount as may be awarded as compensation to
the consumer for any loss or injury suffered by the consumer due
to the negligence of the opposite party including to grant punitive
damages. But the forums under the Act cannot award interest
B
and/or compensation by applying rule of thumb. The order to grant
interest at the maximum of rate of interest charged by nationalised
bank for advancing home loan is arbitrary and has no nexus with
the default committed. The appellant has agreed to deliver
constructed flats. For delay in handing over possession, the
C consumer is entitled to the consequences agreed at the time of
executing buyer’s agreement. There cannot be multiple heads to
grant of damages and interest when the parties have agreed for
payment of damages @ Rs 10 per square foot per month. Once
the parties agreed for a particular consequence of delay in handing
over of possession then, there have to be exceptional and strong
D
reasons for SCDRC/NCDRC to award compensation at more than
the agreed rate.
16. Though the 1986 Act empowers the authorities to award
compensation for any loss or injury including building damages
but the order of NCDRC or that of SCDRC of awarding compensation
E is without any foundation being laid down by the complainant on
judicially recognised principles and is by rule of thumb. Therefore,
we find that grant of compensation under various heads granted
by NCDRC cannot be sustained.”
14.2. The case of Wing Commander Arifur Rahman Khan
F (supra) had been another one of delay in delivery of possession wherein
this Court enunciated principles for awarding of compensation for such
delay. In that context, this Court held that compensation in excess of
stipulated amount in the agreement was allowable when the stipulated
compensation was unreasonable and unfair. Therein, this Court ultimately
G allowed simple interest @ 6% p.a. with the following observations and
directions:
“69. For the above reasons we have come to the conclusion that
the dismissal of the complaint by NCDRC was erroneous. The flat
buyers are entitled to compensation for delayed handing over of
H possession and for the failure of the developer to fulfil the
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1127
MERCHANT [DINESH MAHESHWARI, J.]

representations made to flat buyers in regard to the provision of A
amenities. The reasoning of NCDRC on these facets suffers from
a clear perversity and patent errors of law which have been noticed
in the earlier part of this judgment. Allowing the appeals in part,
we set aside the impugned judgment and order of NCDRC dated 2-
7-2019 [Rasheed Ahmad Usmani v. DLF Ltd., 2019 SCC OnLine
B
NCDRC 84] dismissing the consumer complaint. While doing so,
we issue the following directions:
69.1. Save and except for eleven appellants who entered into
specific settlements with the developer and three appellants who
have sold their right, title and interest under the ABA, the first and
second respondents shall, as a measure of compensation, pay an C
amount calculated @ 6 per cent simple interest per annum to
each of the appellants. The amount shall be computed on the total
amounts paid towards the purchase of the respective flats with
effect from the date of expiry of thirty-six months from the
execution of the respective ABAs until the date of the offer of D
possession after the receipt of the occupation certificate.”
14.3. The case of DLF Homes Developers Ltd. (supra), dealt
with by a 3-Judge Bench of this Court, had also been of delay in delivery
of possession and therein, this Court held that compensation for such
delay over and above contractual rate was allowable even when the E
seller had given the option to the buyer to exit with interest. In that
context, this Court held that such exit option would not disentitle the flat
purchaser from claiming compensation. This Court observed, inter alia,
as under: -
“8….The fact that the developer offered an exit option with F
interest at 9% would not disentitle the flat purchasers from claiming
compensation. For a genuine flat buyer, who has booked an
apartment in the project not as an investor or financier, but for the
purpose of purchasing a family home, a mere offer of refund
would not detract from the entitlement to claim compensation. A
genuine flat buyer wants a roof over the head. The developer G
cannot assert that a buyer who continues to remain committed to
the agreement for purchase of the flat must forsake recourse to a
claim for compensation occasioned by the delay of the developer.
Mere refund of consideration together with interest would not
provide a just recompense to a genuine flat buyer, who desires H
1128 SUPREME COURT REPORTS [2023] 5 S.C.R.

A possession and remains committed to the project. It was for each
buyer to either accept the offer of the developer or to continue
with the agreement for purchase of the flat.
9. Similar is the position in regard to the submission on the
appreciation of the value of the flats. Undoubtedly, this is one
B factor which has to be borne in mind in considering whether and,
if so to what extent, compensation for delay should be awarded.
Having regard to the principles which have been enunciated in
the earlier two decisions [Arifur Rahman Khan v. DLF Southern
Homes (P) Ltd., (2020) 16 SCC 512] , [Pioneer Urban Land &
Infrastructure Ltd. v. Govindan Raghavan, (2019) 5 SCC 725 :
C (2019) 3 SCC (Civ) 37] which have been noted above, we are
unable to subscribe to the submission that the flat buyers are not
entitled to any payment whatsoever on account of delayed
compensation.”
14.3.1. In the said case, this Court reduced the compensation on
D account of delay in handing over possession from 7% p.a. as awarded
by the National Commission to 6% p.a. in light of the decision in Wing
Commander Arifur Rahman Khan (supra).
14.4. In the case of Ireo Grace Realtech (supra), another 3-
Judge Bench of this Court dealt with different categories of cases, some
E relating to delay in offering possession and some relating to such allottees
who had been offered alternative units. This Court found such other
allottees who had not been offered possession of the units allotted to
them to be entitled to refund of the amount deposited by them but their
claim for award of compound interest was declined for having no nexus
F with the commercial realities of the prevailing market. The consideration
of this Court in relation to such class of allottees with the relevant
observations could be usefully reproduced as under:
“47. Insofar as the allottees in Chart B are concerned, they have
paid part consideration, in most cases up to the 4th instalment till
G 2017, when they found that there was no progress being made in
respect of the Towers in which the apartments had been allotted
to them. It is an admitted position that occupation certificate for
Towers A1, A2, A3, B7, C9 and C11, in which the allotments have
been made for this category has not been issued by the Municipal
Corporation. The apartments have not been ready for allotment
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1129
MERCHANT [DINESH MAHESHWARI, J.]

even as on 30-6-2020, as per the date fixed before RERA A
Authority.
48. The allottees submitted that they were facing great hardship
since they had obtained loans from banks for purchasing these
apartments, and were paying high rates of interest. In 2017, when
they realised that there was no construction activity in progress, B
they were constrained to file consumer complaints before the
National Commission, and then discontinued payment of further
instalments.
49. The developer made an alternate offer of allotment of
apartments in Phase 1 of the project. The allottees are however C
not bound to accept the same because of the inordinate delay in
completing the construction of the Towers where units were
allotted to them. The occupation certificate is not available even
as on date, which clearly amounts to deficiency of service. The
allottees cannot be made to wait indefinitely for possession of the
apartments allotted to them, nor can they be bound to take the D
apartments in Phase 1 of the project. The allottees have submitted
that they have taken loans, and are paying high rates of interest to
the tune of 7.9%, etc. to the banks. Consequently, we hold that
the allottees in Chart B are entitled to refund of the entire amount
deposited by them. E
50. Insofar as award of compensation by payment of interest is
concerned, Clause 13.4 of the apartment buyer’s Agreement
provides that the developer shall be liable to pay the allottee
compensation calculated @ Rs 7.5 per square foot of the super
area for every month of delay, after the end of the grace period. F
The compensation will be payable only for a period of 12 months.
The apartment buyers in their complaint filed before the National
Commission made a prayer for refund of the amount deposited
along with interest @ 20% p.a. compounding quarterly till its
realisation. The apartment buyers, in their submissions have stated
that they have obtained home loans on which interest @ 7.90% G
p.a. is being paid, even as on date.
51. We have considered the rival submissions made by both the
parties. The delay compensation specified in the apartment buyer’s
Agreement of Rs 7.5 per square foot which translates to 0.9% to
H
1130 SUPREME COURT REPORTS [2023] 5 S.C.R.

A 1% p.a. on the amount deposited by the apartment buyer cannot
be accepted as being adequate compensation for the delay in the
construction of the project. At the same time, we cannot accept
the claim of the apartment buyers for payment of compound
interest @ 20% p.a., which has no nexus with the commercial
realities of the prevailing market. We have also taken into
B
consideration that in IREO Grace Realtech (P) Ltd. v. Subodh
Pawar [IREO Grace Realtech (P) Ltd. v. Subodh Pawar, 2019
SCC OnLine SC 1937], this Court recorded the statement of the
counsel for the developer that the amount would be refunded with
interest @ 10% p.a. A similar order was passed in IREO Grace
C Realtech (P) Ltd. v. Surendra Arora [IREO Grace Realtech (P)
Ltd. v. Surendra Arora, 2019 SCC OnLine SC 1943]. However,
the order in these cases were passed prior to the outbreak of the
pandemic.
52. We are cognizant of the prevailing market conditions as a
D result of Covid-19 Pandemic, which have greatly impacted the
construction industry. In these circumstances, it is necessary to
balance the competing interest of both parties. We think it would
be in the interests of justice and fairplay that the amounts deposited
by the apartment buyers is refunded with interest @ 9% SI p.a.
from 27-11-2018 till the date of payment of the entire amount.
E The refund will be paid within a period of three months from the
date of this judgment. If there is any further delay, the developer
will be liable to pay default interest @ 12% SI p.a.
53. The developer shall not deduct the earnest money of 20%
from the principal amount, or any other amount as mentioned in
F Clause 21.3 of the Agreement, on account of the various defaults
committed by the developer, including the delay of over 7 months
in obtaining the fire NOC.”
14.5. The case of NBCC (India) Ltd. (supra) was directly a
case of delayed delivery of possession and therein, this Court awarded
G simple interest @ 7% p.a. for the default period and did not approve of
awarding any additional amount towards compensation. This Court, inter
alia, said as under: -
“13. As regards, the date on which interest would become
payable, having regard to the one-year period which is stipulated,
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1131
MERCHANT [DINESH MAHESHWARI, J.]

beyond two and a half years from the original period under Clause A
20, interest would become payable from 1-1-2016. Secondly, insofar
as the rate of interest is concerned, the interest should be fixed at
7% p.a. instead and in place of 10% which has been awarded
by NCDRC. Interest @ 10% is excessive, in light of prevailing
market conditions. [Central Bank of India v. Ravindra, (2002)
B
1 SCC 367, SCC para 39.]
14. NCDRC has, in addition to the award of interest, granted
compensation of Rs 2,00,000 for loss of rent.
Once NCDRC awarded interest for the delayed handing over of
possession, there would be no justification to award an additional
amount of Rs 2,00,000.” C

14.6. In the case of Experion Developers Pvt. Ltd. (supra),
another 3-Judge Bench of this Court dealt with a case where the developer
did not offer possession within the period stipulated in the agreement
and the complainant sought refund of the total consideration of Rs.
2,06,41,379/- with interest at the rate of 24% p.a. The reasons given by D
the developer for delay in handing over the possession was non-availability
of occupation certificate and it was pointed out that after securing
occupation certificate on 23.07.2018, notice of possession was issued to
the consumers on 24.07.2018. It was, therefore, claimed that possession
could be handed over and the complaint ought to be dismissed. The E
National Commission allowed the complaint and directed the developer
to refund the deposited amount with interest @ 9% p.a. In the given
context, this Court examined the other decisions of this Court as also the
contentions concerning the provisions of the Real Estate (Regulation
and Development Act), 2016 and held that the Commission has the power
and jurisdiction to direct return of money under Section 14 of the Act of F
1986 if the consumer so chooses. The order of the National Commission
was approved by this Court with the following observations: -
“28. The Consumer in present case prayed for the solitary relief
for return of the amount paid towards purchase of the apartment
without a prayer for alternate relief. Recognizing the right of the G
Consumer for return of the amount with interest and compensation,
the Commission passed an order directing the Developer as under:
“The opposite party shall refund an amount of Rs.
2,06,41,379/- paid by the complainant along with interest
H
1132 SUPREME COURT REPORTS [2023] 5 S.C.R.

A @ 9% p.a. from the date of last deposit before the due
date of possession till actual payment on the amount paid
before due date of possession and after this date if any
amount is deposited, then from the date of deposit till actual
payment.”
B 29. For the reasons stated above, we are of the opinion that the
Commission has correctly exercises its power and jurisdiction in
passing the above directions for refund of the amount with
interest.”
14.7. A look at the decisions aforesaid makes it clear that though
C in most of the cases, the questions were relating to the compensation for
delayed delivery of possession but even in the cases where possession
was not being delivered by the builder or not being taken by the purchaser
for a valid reason, the award of compensation was restricted to the
refund with simple interest in the range 6% to 9% p.a. The claim for
awarding compound interest, as in the case of Ireo Grace Realtech (P)
D Ltd. (supra), was declined by this Court while observing that it had ‘no
nexus with the commercial realities of the prevailing market’.
The decision in Manjeet Kaur Monga’s Case and its
connotations

E 15. We may now closely examine the decision of this Court in Dr.
Manjeet Kaur Monga’s case that has been the sheet anchor of the
entire consideration of the State Commission as also the National
Commission in awarding compensation in terms of compound interest.
The said decision has been strongly relied upon by the respondent while
the appellant has attempted to distinguish the same. Having regard to
F the importance of the questions involved and for clarity on all the relevant
aspects, we deem it appropriate to reproduce the entire judgment of this
Court in Dr. Manjeet Kaur Monga with its extractions (even at the
cost of a little extra length of this judgment) as under: -
“Leave granted in SLPs (C) Nos. 10484-85 of 2016 and 10481-
G 82 of 2016.
2. The appellant in Civil Appeals Nos. 5032-33 of 2016, who is
the legal representative of the original complainant, is before us
aggrieved by the order dated 3-8-2015 passed by the Competition
Appellate Tribunal, New Delhi (for short “the Tribunal”)
H in Manjeet Kaur Monga v. K.L. Suneja [Manjeet Kaur
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1133
MERCHANT [DINESH MAHESHWARI, J.]

Monga v. K.L. Suneja, 2015 SCC OnLine Comp AT 593], paras A
37 and 42 to 44 of the impugned order read as follows: (SCC
OnLine Comp AT)
“37. The cancellation of allotment made in favour of the
complainant deserves to be declared as wholly arbitrary, illegal
and capricious. It is not in dispute that Smt Gursharan Kaur B
had deposited three instalments including the booking amount.
The complainant, Dr (Ms) Manjeet Kaur Monga deposited three
other instalments (total Rs 4,53,850). She did not deposit further
instalments because the respondents did not complete the
construction within the stipulated time. For the first time a vague
statement about the construction was made in letter dated 26- C
12-2001, which was issued after 12 years of the booking. Even
thereafter the respondents did not disclose the stage-wise
progress in the construction work and, as mentioned above,
they deliberately misconstrued the complainant’s protest dated
22-5-2002 as her disinclination to take the flat. Between 2002 D
and 2005 i.e. the date on which the cancellation letter was
issued, the respondents neither entered into any correspondence
with the complainant nor apprised her about the progress made
in the construction. Therefore, it must be held that the
complainant was justified in not paying further instalments of
price and the respondents committed grave illegality by E
cancelling the allotment.
* * *
42. In my view, even though the Tribunal cannot, in view of
the law laid down in Ved Prakash Aggarwal F
case [Ghaziabad Development Authority v. Ved Prakash
Aggarwal, (2008) 7 SCC 686], issue direction to the respondents
to deliver physical possession of the flat, there is ample
justification for awarding compensation by invoking Section
12-B of the Act and even otherwise, because the complainant
and her legal representatives have been subjected to harassment G
for the period of more than 25 years. If the building had been
completed within three years as promised by the respondents,
the complainant may have got possession thereof and utilised
the same. She could not do so during her lifetime and her legal
representatives have been compelled to pursue this litigation. H
1134 SUPREME COURT REPORTS [2023] 5 S.C.R.

A It is an admitted position that between August 1989 and October
1993, Smt Gursharan Kaur and the complainant deposited a
total sum of Rs 4,53,850 in the form of instalments. The
respondents not only failed to complete the project within the
stipulated time but also failed to return the instalments deposited
by Smt Gursharan Kaur and the complainant. The amount was
B
returned only along with the cancellation letter and, as mentioned
above, the complainant had returned the pay order with the
legal notice sent on 7-9-2005.
43. Though Section 12-B empowers the Tribunal to award
compensation but no criteria has been laid down by the
C legislature for exercise of that power. However, keeping in
view the fact that the construction of the flat was delayed by
more than one decade and the amount of instalments deposited
by Smt Gursharan Kaur and the complainant totalling Rs
4,53,850 was retained by the respondents for a period ranging
D from 15 years to more than 12 years, I feel that ends of justice
would be served by directing the respondents to pay compound
interest @ 15% per annum to the legal representatives of the
complainant.
44. Accordingly, UTPE No. 90 of 2005 and CA No. 39 of
E 2009 are disposed of in the following terms:
(i) It is declared that the respondents have acted in violation of
Sections 36-A(1)(i), (ii) and (ix) of the Act and they are guilty
of unfair trade practice,
(ii) The complainant’s prayer for directing the respondents to
F deliver possession of Flat B-301 in Siddharth Shila Apartments
is rejected,
(iii) The respondents are directed to pay compound interest
@ 15% per annum to the legal representatives of the
complainant. The interest shall be calculated on each instalment
G paid by Smt Gursharan Kaur and the complainant from the
date of deposit till 30-4-2005 i.e. the date on which the allotment
was cancelled, and
(iv) The respondents shall pay Rs 4,53,850 and compound
interest to the legal representatives of the complainant in terms
H of (iii) above within a period of three months from today. If
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1135
MERCHANT [DINESH MAHESHWARI, J.]

the needful is not done, then the legal representatives of the A
complainant shall be entitled to file appropriate application for
execution of this order.”
3. Since the facts have clearly emerged from what we have
extracted above, we need not to go into the factual matrix. The
contention of the appellant is that since the allotment has been B
cancelled, the appellant should be entitled to compound interest
@ 15% from the original dates of payment from 1989 till the date
of payment and there is no justification in limiting the interest to
30-4-2005.
4. It is the contention of the respondents, who have filed separate C
appeals arising from SLPs (C) Nos. 10484-85 of 2016 and SLPs
(C) Nos. 10481-82 of 2016, that the company and the director
have no liability to pay the compound interest even assuming that
the appellant in Civil Appeals Nos. 5032-33 of 2016 is entitled to
any compensation. It can be only the amount determined under
Section 12-B of the Monopolies and Restrictive Trade Practices D
Act, 1969 (for short “the Act”). Section 12-B reads as follows:
“12-B. Power of the Commission to award compensation.—
(1) Where, as a result of the monopolistic or restrictive, or
unfair trade practice, carried on by any undertaking or any
person, any loss or damage is caused to the Central E
Government, or any State Government or any trader or class
of traders or any consumer, such Government or, as the case
may be, trader or class of traders or consumer may, without
prejudice to the right of such Government, trader or class of
traders or consumer to institute a suit for the recovery of any F
compensation for the loss or damage so caused, make an
application to the Commission for an order for the recovery
from that undertaking or owner thereof or, as the case may be,
from such person, of such amount as the Commission may
determine, as compensation for the loss or damage so caused.
G
(2) Where any loss or damage referred to in sub-section (1) is
caused to numerous persons having the same interest, one or
more of such persons may, with the permission of the
Commission, make an application, under that sub-section, for
and on behalf of, or for the benefit of, the persons so interested,
and thereupon the provisions of Rule 8 of Order 1 of the First H
1136 SUPREME COURT REPORTS [2023] 5 S.C.R.

A Schedule to the Code of Civil Procedure, 1908 (5 of 1908),
shall apply subject to the modification that every reference
therein to a suit or decree shall be construed as a reference to
the application before the Commission and the order of the
Commission thereon.
B (3) The Commission may, after an inquiry made into the
allegations made in the application filed under sub-section (1),
make an order directing the owner of the undertaking or other
person to make payment, to the applicant, of the amount
determined by it as realisable from the undertaking or the owner
thereof, or, as the case may be, from the other person, as
C compensation for the loss or damage caused to the applicant
by reason of any monopolistic or restrictive, or unfair trade
practice carried on by such undertaking or other person.
(4) Where a decree for the recovery of any amount as
compensation for any loss or damage referred to in sub-section
D (1) has been passed by any court in favour of any person or
persons referred to in sub-section (1), or, as the case may be,
sub-section (2), the amount, if any, paid or recovered in
pursuance of the order made by the Commission under sub-
section (3) shall be set off against the amount payable under
E such decree and the decree shall, notwithstanding anything
contained in the Code of Civil Procedure, 1908 (5 of 1908), or
any other law for the time being in force, be executable for the
balance, if any, left after such set off.”
5. We do not think that there needs to be any elaborate consideration
F of the meaning of the word “compensation” in terms of the amount
referred to under the section. The amount referred to under the
section is the amount @ 15% compound interest on the amount
already deposited, as ordered [Manjeet Kaur Monga v. K.L.
Suneja, 2015 SCC OnLine Comp AT 593] by the Tribunal. Merely,
because a liquidated amount is not stipulated or determined by the
G Tribunal, it cannot be said that it is not the compensation. Once
the interest, as ordered by the Tribunal, is calculated that will be
the amount of compensation referred to under Section 12-B of
the Act.
6. During the course of hearing of the appeals another interesting
H point came up for consideration. It has been brought to the notice
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1137
MERCHANT [DINESH MAHESHWARI, J.]

of this Court that when the builder company, the appellant in the A
appeals arising out of SLPs (C) Nos. 10484-85 of 2016, had taken
the pay order from Citibank on 30-4-2005, the amount of Rs
4,53,750 covered by the pay order had actually been deducted
from their current account. But at the same time, the amount had
not been paid/received by the payee. In the instant case, the
B
account-holder cancelled the pay order and requested for re-credit
of the amount and, accordingly, it is seen that Citibank has re-
credited the amount to the account only on 22-6-2016. It is the
contention of the account-holder company that for the period the
money was with the Bank, the account-holder is entitled to interest
and that can be the compensation if at all that can be paid to the C
appellant in Civil Appeals Nos. 5032-33 of 2016 for the period
after the cancellation of the allotment. We may, of course, take
note of the submission of the builder that in terms of the principles
of restitution under Section 144 CPC and on the general principle
of restitution, the builder cannot be put to unmerited injustice and
D
the appellant should not take the undue advantage as held by this
Court in Citibank N.A. v. Hiten P. Dalal [Citibank N.A. v. Hiten
P. Dalal, (2016) 1 SCC 411 : (2016) 1 SCC (Civ) 342] , as
canvassed by the learned counsel appearing for the builder.
7. The learned counsel appearing for Citibank, inviting our
reference to the additional affidavit contended that it is a fact that E
the money from the current account of the builder has been
deducted on 30-4-2005 and it has not been paid to the payee. But,
at the same time, it cannot be said that the money was enjoyed by
the Bank, since being a pay order, at any moment the instrument
is presented, the Bank was bound to honour the same and, F
therefore, only for the lapse on the part of either the payee or the
account-holder for encashing or cancelling the instrument, the Bank
cannot be saddled with any interest. It is also submitted by the
learned counsel appearing for the Bank that they are governed by
the instructions issued by Reserve Bank of India in that regard.
G
8. We find from the order [Manjeet Kaur Monga v. K.L. Suneja,
2015 SCC OnLine Comp AT 593] of the Tribunal that both the
issues have not been gone into, apparently because these aspects
have not been canvassed and obviously because Citibank was
not before the Tribunal.
H
1138 SUPREME COURT REPORTS [2023] 5 S.C.R.

A 9. To that limited extent we propose to send back the matters to
the Tribunal. Therefore, these appeals are disposed of as follows:
9.1. Citibank N.A., represented by its Manager, Jeevan Bharti
Building, 124, Connaught Circus, New Delhi will stand impleaded
as additional respondent in the complaint before the Competition
B Appellate Tribunal, New Delhi.
9.2. The builder shall pay the compensation worked @ 15%
compound interest up to 30-4-2005.
9.3. Whether there should be any compensation and if so, what
should be the amount payable after 30-4-2005 and whether Citibank
C is liable to pay any interest to the account-holder by the Tribunal.
10. To the above limited extent, we remit the matters to the
Competition Appellate Tribunal, New Delhi.
11. It will be open to the parties to take all available contentions in
D respect of the issues remitted to the Tribunal.
12. With the above observations and directions, the appeals are
disposed of.
13. Pending applications, if any, shall stand disposed of. There
shall be no orders as to costs.”
E 15.1. The observations and directions in paragraphs 6 to 11 in the
aforesaid decision led to another round of litigation that culminated in the
other decision of this Court in K.L Suneja (supra) wherein, ultimately,
this Court declined any interest to the complainant after tender of the
amount by the developer. In the given context, this Court observed, inter
F alia, as under: -
“31. The provisions of Order XXI are applicable to decrees
of civil court. However, they embody a sound policy principle,
that if the amount is deposited, or paid to the decree holder or
person entitled to it, the person entitled to the amount cannot later
G seek interest on it. This is a rule of prudence, inasmuch as the
debtor, or person required to pay or refund the amount, is under
an obligation to ensure that the amount payable is placed at the
disposal of the person entitled to receive it. Once that is complete
(in the form of payment, through different modes, including
tendering a Banker’s Cheque, or Pay Order or Demand Draft, all
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1139
MERCHANT [DINESH MAHESHWARI, J.]

of which require the account holder/debtor to pay the bank, which A
would then issue the instrument) the tender, or ‘payment’ is
complete.
32. In the present case, the complainant was aware that
the Pay Order had been tendered by the developer to her;
nevertheless she filed the original Pay Order with her complaint, B
and did not seek any order from the MRTP Commission at the
relevant time. The pleadings in the complaint did not disclose that
the Pay Order was filed in the Commission, to enable the developer
to respond appropriately. In these circumstances, the developer’s
argument that the rule embodied in Order XXI, Rule 4 CPC, is
applicable, is merited. The developer cannot be fastened with any C
legal liability to pay interest on the sum of Rs. 4,53,750/- after
30th April 2005.
33. This court is also of the opinion that the complainant’s
argument that on account of the omission of the developer, she
was wronged, and was thus entitled to receive interest, cannot D
prevail. The records nowhere disclose any fault on the part of the
developer; on the other hand, the complainant did not take steps
to protect her interests. It has been held by this court, in Sailen
Krishna Majumdar v. Malik Labhu Masih [Sailen Krishna
Majumdar v. Malik Labhu Masih, (1989) 1 SCR 817] that in such E
cases, even if equities are equal, the court should not intervene:
“Equity is being claimed by both the parties. Under the
circumstances we have no other alternative but to let the
loss lie where it falls. As the maxim is, ‘in aequali jure
melior est conditio possidentis’. Where the equities are F
equal, the law should prevail. The respondent’s right to
purchase must, therefore, prevail.”
34. In the present case too, the complainant cannot claim
interest from the developer, who had returned the Pay Order. As
discussed, at the time of filing of the complaint, she could have G
chosen one among the various options to ensure that the amount
presented to her was kept in an interest-bearing account, without
prejudice to her rights to claim interest later. In these
circumstances, no equities can be extended to her aid.

H
1140 SUPREME COURT REPORTS [2023] 5 S.C.R.

A 35. As regards the complainant’s appeal, the contention is
that the impugned order is in error, because the Tribunal ought to
have directed that the developer ought to have been directed to
pay interest on the sum of Rs. 4,53,750/- from 4th October 1993
till the date of its realization i.e., 7th May 2016. This plea is plainly
untenable, because the interest payable for the past period was
B
concluded in the previous proceedings. The complainant did not
point to any rule or binding legal principle which obliged the
developer to pay such interest, or justify the direction in the
impugned order, by showing how such liability arose in the facts
and circumstances of this case.”
C 15.2. The said case of Dr. Manjeet Kaur Monga had been of
claiming compensation under the provisions of MRTP Act whereas the
present one is a case of claiming compensation under the Consumer
Protection Act, 1986. Hence, a comparison of the provisions of Section
14(1)(d) of the Act of 1986 and Section 12-B(3) of MRTP Act, as regards
D powers of respective fora, shall be apposite and could be made as under:-

E

F

G

16. The question is as to whether the aforesaid decision in Dr.
Manjeet Kaur Monga could be read as laying down a principle of
universal applicability that in such matters of dealing in real estate, the
8
The proviso aforesaid was inserted by Act 62 of 2002 with effect from 15.03.2003
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1141
MERCHANT [DINESH MAHESHWARI, J.]

question of compensation or damages could be determined invariably by A
awarding compound interest whenever the deposited money is to be
returned by the builder or developer in case of default in carrying out its
obligations under the agreement and in failing to deliver the property
envisaged by the agreement. In our view, the answer could only be in
the negative.
B
16.1. It is at once clear on a bare look at the aforesaid decision of
this Court in Dr. Manjeet Kaur Monga that therein, the Competition
Appellate Tribunal, while exercising powers under Section 12-B of the
MRTP Act, directed the builder to pay compound interest at rate of 15%
p.a. from the date of deposit and until the date on which allotment was
cancelled. There were cross appeals in this Court. The complainant in C
her appeals questioned the award of compound interest only until the
date of cancellation and sought the same until the date of payment. On
the other hand, the builders, that is, the present appellants, contended
that they could not be made liable to pay compound interest because
even if the complainant was entitled to any compensation, it could only D
be that of the amount determined under Section 12-B MRTP Act. In this
background and in regard to such contentions of the present appellants,
this Court observed that there was no need for any interpretation of the
meaning of the term “compensation” because once the amount of interest
as ordered by COMPAT was calculated, that would be the compensation
referred to under Section 12-B of the MRTP Act; and merely because E
liquidated amount was not stipulated or determined by COMPAT, it could
not be said that the awarded amount was not that of compensation. This
all was said by this Court, as could be noticed from paragraph 5 in the
extraction aforesaid. In the subsequent passages, this Court adverted to
another peculiar feature of this case where the amount of pay order, F
despite being deducted from current account of appellants, did not reach
the payee and re-credit was allowed by the bank more than 11 years
later; and as the bank was not a party to the litigation, the said aspect
was remitted for consideration of COMPAT.
16.2. In the aforesaid decision in Dr. Manjeet Kaur Monga by G
this Court, the question was not raised as to whether compound interest
could be granted as a measure of compensation nor this Court decided
so. The question raised had been the other way round that COMPAT
had not specified the amount of compensation payable, to which, this
Court observed that calculating the amount as per directions of COMPAT
would lead to the quantum of compensation. H
1142 SUPREME COURT REPORTS [2023] 5 S.C.R.

A 17. What has been argued before us on behalf of respondent is
essentially on the basis of the relief granted by COMPAT to the said
complainant Dr. Manjeet Kaur Monga, which was not interfered with
by this Court. That aspect, in our view, only relates to the conclusion of
the decision and not to its ratio decidendi.
B 17.1. It has rightly been argued on behalf of the appellants that a
judgment is an authority only in regard to its ratio which is required to be
discerned; and a decision cannot be regarded as an authority in regard
to its conclusion alone or even in relation to what could be deduced
therefrom. In Sanjay Singh (supra), a 3-Judge Bench of this Court has
explained these principles in clear terms as follows: -
C
“10. The contention of the Commission also overlooks the
fundamental difference between challenge to the final order
forming part of the judgment and challenge to the ratio decidendi
of the judgment. Broadly speaking, every judgment of superior
courts has three segments, namely, (i) the facts and the point at
D issue; (ii) the reasons for the decision; and (iii) the final order
containing the decision. The reasons for the decision or the ratio
decidendi is not the final order containing the decision. In fact, in
a judgment of this Court, though the ratio decidendi may point to a
particular result, the decision (final order relating to relief) may be
E different and not a natural consequence of the ratio decidendi of
the judgment. This may happen either on account of any subsequent
event or the need to mould the relief to do complete justice in the
matter. It is the ratio decidendi of a judgment and not the final
order in the judgment, which forms a precedent.”

F 18. Keeping the principles aforesaid in view and for what has
been discussed hereinbefore in regard to ratio decidendi of the decision
in Dr. Manjeet Kaur Monga, it is but clear that the said decision cannot
be read in support of the principle that compensation and/or punitive
damages in terms of the Act of 1986 could also be by way of compound
interest. As noticed, the State Commission has awarded compound
G interest, and National Commission has approved such awarding of
compound interest to the present respondent, only with reference to the
said decision in the case of Dr. Monga. When we do not find ratio
decidendi of Dr. Monga leading to the enunciation in favour of awarding
compensation and/or punitive damages by way of compound interest,
H the substratum of the orders impugned is knocked to the ground.
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1143
MERCHANT [DINESH MAHESHWARI, J.]

The complexities of present matter requiring further A
exploration
19. However, the complexities of the present matter are that even
the observations and conclusions foregoing cannot be taken as decisive
of the matter. It is because of the other pertinent factors that in Dr.
Monga’s case, compound interest was indeed awarded against the very B
same builders in relation to the very same project. The respondent asserts
to be identically situated and rather having suffered excessive losses for
a longer period of time. The respondent has been awarded compound
interest at rate of 14%. The frequency of compounding has not been
specified but, we may take it as that of yearly rests. In the circumstances,
the question to be addressed is as to whether compound interest could C
have been allowed in this case under the Act of 1986 and if so, until
which date and for what period. Therefore, a little further exploration is
requisite.
20. The submissions on behalf of the appellants that wherever the
legislature considered it permissible to award compound interest it has D
provided so in the enactment, has its own limitations. The illustrations
placed before this Court by the learned counsel for the appellants
concerning different enactments, though make it clear that in certain
eventualities, the legislature has indeed specified the award of compound
interest. Mostly, it has been provided so in relation to any monetary E
involvement having the trappings of public interests in it. The Act of
1986, on the other hand, being a beneficial legislation, inter alia, empowers
the Consumer Fora to direct payment of such amount as may be awarded
as compensation to the consumer for any loss or injury suffered due to
the negligence of the opposite party. The proviso added to Clause (d) of
Section 14(1) of the Act of 1986 empowers the Forum to grant punitive F
damages in such circumstances as it deems fit. That being the position,
it cannot be laid down in absolute terms that for no such stipulation
regarding compound interest being available in the Act of 1986, the same
can never be granted by the Consumer Fora. Equally, when the matter
is being considered for award of compensation and/or punitive damages, G
want of stipulation in the contract as regards award of compound or
simple interest, cannot be decisive of the matter.
20.1. In the case of Clariant International Ltd. (supra), the Court
was considering the power of Securities & Exchange Board of India to
direct payment of compensation and interest to the shareholders of the H
1144 SUPREME COURT REPORTS [2023] 5 S.C.R.

A target company because of delay in or failure to make public offer after
takeover. This Court, inter alia, held that in the absence of any agreement
or statutory provision or mercantile usage, interest payable could only be
at the market rate; and the interest could be payable upon establishing
totality of circumstances justifying exercise of such equitable jurisdiction.
This Court, inter alia, observed and held as under: -
B
“30. Interest can be awarded in terms of an agreement or statutory
provisions. It can also be awarded by reason of usage or trade
having the force of law or on equitable considerations. Interest
cannot be awarded by way of damages except in cases where
money due is wrongfully withheld and there are equitable grounds
C therefor, for which a written demand is mandatory.
31. In absence of any agreement or statutory provision or a
mercantile usage, interest payable can be only at the market rate.
Such interest is payable upon establishment of totality of
circumstances justifying exercise of such equitable jurisdiction.
D (See Municipal Corpn. of Delhi v. Sushila Devi [(1999) 4 SCC
317] , SCC para 16.)
32. In Executive Engineer, Dhenkanal Minor Irrigation
Division v. N.C. Budharaj [(2001) 2 SCC 721] Raju, J. speaking
for the majority held that a person deprived of the use of money
E to which he is legitimately entitled has a right to be compensated
for the deprivation by whatever name it may be called, namely,
interest, compensation or damages.”
20.2. In the case of Central Bank of India (supra), the
Constitution Bench of this Court essentially dealt with the question as to
F the meaning to be assigned to the phrases “the principal sum adjudged”
and “such principal sum”, as occurring in Section 34 of the Code of Civil
Procedure, 1908. The Constitution Bench answered the reference in
the following terms: -
“58. Subject to the above we answer the reference in the following
G terms:
(1) Subject to a binding stipulation contained in a voluntary contract
between the parties and/or an established practice or usage interest
on loans and advances may be charged on periodical rests and
also capitalised on remaining unpaid. The principal sum actually
H advanced coupled with the interest on periodical rests so capitalised
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1145
MERCHANT [DINESH MAHESHWARI, J.]

is capable of being adjudged as principal sum on the date of the A
suit.
(2) The principal sum so adjudged is “such principal sum” within
the meaning of Section 34 of the Code of Civil Procedure, 1908
on which interest pendente lite and future interest i.e. post-decree
interest, at such rate and for such period which the court may B
deem fit, may be awarded by the court.”
20.2.1. The said case, essentially on enunciation of the principles
relating to charge of interest by a creditor with reference to stipulation in
the contract, or by a practice or usage when established, subject to the
statutory provision, does not have an application to the question at hand. C
21. On the other hand, the observations made by this Court in the
case of Indian Council for Enviro-Legal Action (supra), which have
been extensively relied upon by the learned counsel for the respondent
cannot as such be applied to the case at hand either. In the said case,
this Court dealt with the principles governing compensation for the loss D
suffered by citizenry due to pollution and the ‘polluter pays’ principle.
Such observations, essentially relating to public law remedies under
inherent powers of this Court, are difficult to be applied to the case of
the present nature, essentially emanating from the allegations of breach
of contract. In other words, the observations of this Court as regards
disgorgement of all the benefits arrived at by the wrongdoer and restitution E
in full and effective form are difficult to be directly applied to the nature
of claim in the present case. The set up and background in which the
Court made the observations could be noticed from paragraph 169 of
the said decision that reads as under: -
“169. In the point under consideration, which does not arise from F
a suit for recovery under the Code of Civil Procedure, the inherent
powers in the court and the principles of justice and equity are
each sufficient to enable an order directing payment of compound
interest. The power to order compound interest as part of restitution
cannot be disputed, otherwise there can never be restitution.” G
21.1. A few other referred paragraphs of the said decision may
also be reproduced, which read as under: -
“177. This Court in Alok Shanker Pandey v. Union of
India [(2007) 3 SCC 545] observed as under: (SCC p. 547, paras
8 and 9) H
1146 SUPREME COURT REPORTS [2023] 5 S.C.R.

A “8. We are of the opinion that there is no hard-and-fast rule
about how much interest should be granted and it all depends
on the facts and circumstances of each case. We are of the
opinion that the grant of interest of 12% per annum is
appropriate in the facts of this particular case. However, we
are also of the opinion that since interest was not granted to
B
the appellant along with the principal amount, the respondent
should then in addition to the interest at the rate of 12% per
annum also pay to the appellant, interest at the same rate on
the aforesaid interest from the date of payment of instalments
by the appellant to the respondent till the date of refund on this
C amount, and the entire amount mentioned above must be paid
to the appellant within two months from the date of this
judgment.
9. It may be mentioned that there is misconception about
interest. Interest is not a penalty or punishment at all, but it is
D the normal accretion on capital.”
178. To do complete justice, prevent wrongs, remove incentive
for wrongdoing or delay, and to implement in practical terms the
concepts of time value of money, restitution and unjust enrichment
noted above—or to simply levelise—a convenient approach is
E calculating interest. But here interest has to be calculated on
compound basis—and not simple—for the latter leaves much
uncalled for benefits in the hands of the wrongdoer.
179. Further, a related concept of inflation is also to be kept in
mind and the concept of compound interest takes into account, by
F reason of prevailing rates, both these factors i.e. use of the money
and the inflationary trends, as the market forces and predictions
work out.
180. Some of our statute law provide only for simple interest and
not compound interest. In those situations, the courts are helpless
G and it is a matter of law reform which the Law Commission must
take note and more so, because the serious effect it has on the
administration of justice. However, the power of the Court to order
compound interest by way of restitution is not fettered in any
way. We request the Law Commission to consider and recommend
necessary amendments in relevant laws.”
H
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1147
MERCHANT [DINESH MAHESHWARI, J.]

21.2. The observations aforesaid, as occurring in the referred A
decision in the case of Alok Shankar Pandey (supra) make it clear that
there could be no hard and fast rule as to how much interest should be
granted and it would depend on the facts and circumstances of each
case. However, interest is not considered to be a penalty or punishment
but is considered to be a normal accretion on capital.
B
21.3. The decision of English Courts cannot be taken as instructive
in view of the principles available in the decisions of this Court and the
entirely different socio-economic factors. Hence, we do not propose to
dilate on the decision in the case of Wallersteiner (supra) as cited by
the learned counsel for the respondent but, this much is apparent from
the said decision too that in the absence of statutory provisions, the C
principles of equity have been invoked for awarding interest.
22. The synthesis of the cited decisions aforesaid, for the present
purpose, leads to the result that none of these decisions could be taken
as guide for award of compound interest in an action before the Consumer
Fora under the Act of 1986. In regard to such cases, in our view, the D
forum would be entitled to provide for the amount of compensation as
deemed fit, having regard to the facts and circumstances of the case
and the gravity of the negligence of the opposite party and consequential
injury suffered by the consumer. The forum could award even punitive
damages but that would depend on the relevant circumstances and for E
that matter, the relevant factors shall have to be specified. In regard to
such awarding of compensation and/or punitive damages, the forum
concerned could take all the relevant factors into account and award
such amount as deemed fit and necessary but ordinarily, in the matters
of money refund, awarding of compound interest as a measure of punitive
damages is not envisaged. As to what would be the quantum of F
compensation and for that matter, what would be the quantum of punitive
damages, would depend on facts and circumstances of each case but
while awarding so, the forum would be advised to specify all the relevant
factors and basis of its quantification. A shortcut of awarding compound
interest is neither envisaged by the statute nor do we find any such term G
of contract between the parties or any such usage. As noticed, the attempt
to seek compound interest in such real estate dealings did not meet with
approval of this Court and in the case of Ireo Grace Realtech (supra)
such a claim was declined by a 3-Judge Bench of this Court for having
no nexus with the commercial realities of the prevailing market. Going
H
1148 SUPREME COURT REPORTS [2023] 5 S.C.R.

A by the principles governing the nature of jurisdiction of the Consumer
Fora as also the principles enunciated by this Court including those in the
3-Judge Bench decision, we need to disapprove the proposition of
awarding compound interest in the cases of monetary refund in such
dealings.
B 23. Several submissions made on behalf of the respondent as to
the alleged advantage derived by the appellants by retention of money,
again, cannot lead to award of compound interest while ordering refund.
For award of compound interest, relevant factors shall have to be taken
into account which would include uncertainties of market and several
other imponderables. We would hasten to observe that if at all by way of
C compensation, the Consumer Forum considers it proper to examine the
time value for money, an in-depth and thorough analysis would be required
while taking into account all the facts and the material surrounding factors,
including those of realities as also uncertainties of market.
24. In our view, awarding of compound interest with reference to
D Dr. Monga’s case and without examining any other factor has led to
serious inconsistencies; and if the award as made is approved, it could
only lead to unjust enrichment of the respondent in the name of
disgorgement of benefits purportedly derived by the appellants. As
noticed, the State Commission and the National Commission have passed
E rather assumptive orders on the basis of the decision in Dr. Monga that
compound interest was required to be allowed. Various factors recounted
on behalf of the respondent, including excessive harassment and denial
of the fruits of her investment could all lead to a reasonable amount of
compensation but, there appears absolutely no reason that compound
interest be allowed in this matter.
F
25. Having regard to the order proposed to be passed, we are not
entering into the minute calculations and variety of alternatives presented
by the parties before us but, on a broad consideration of the matter, it is
clear that even as per the exemplar sale deeds relating to the same area
and similar flats, the cost of 3 flats booked by the respondent, as at
G present, is in the range of 2.25 crore, whereas the amount payable under
the award in question would be above Rs. 7.35 crore. The respondent
has attempted to compare the circle rates of the land in the area in
question with the submissions that there were no circle rates of the flats
in the year 1989 and the attempt on her part was to make “apples-to-
H apples” comparison and then factorising on the cost of flats. In the first
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1149
MERCHANT [DINESH MAHESHWARI, J.]

place, no such efforts of calculation and assessment were made before A
the State Commission or the National Commission by the respondent.
Secondly, the said Consumer Fora have not returned cogent and
convincing findings on the loss or injury of the respondent with reference
to the relevant factors. We have referred to these aspects only to indicate
that award of compound interest in the present case had neither any
B
foundation in the record nor any backing in law nor the Consumer Fora
took care to examine the contours of their jurisdiction and the requirements
of proper assessment, if at all any compensation and/or punitive damages
were sought to be granted. The impugned orders are difficult to be
sustained.
26. Even while we have disapproved the award of compound C
interest by the Consumer Fora in the cases of the present nature, there
is yet another factor for which the impugned orders are required to be
interfered with. As noticed, the State Commission merely referred to
the decision of COMPAT in Dr. Monga’s case and then referred to the
prayer of the respondent for award of compound interest coupled with D
the fact that possession cannot be handed over to her. On this and with
reference to the observations in the case of Malay Kumar Ganguly
(supra)9, for awarding compensation with such sum of money as to put
the wronged person in the position as he would have been if he had not
sustained the wrong, the State Commission straightaway jumped to the
conclusion of awarding compound interest @ 14%. Apart from other E
shortcomings as noticed above, the State Commission, even while
awarding compound interest @ 14%, did not even take into account the
fact of attempted refund of money by the appellants by the cheque dated
08.11.2005 and did not specify the period of such operation of
compounding of interest. The open-ended and the assumptive order by F
the State Commission had been bereft of logic and had been wanting in
the requisite reasoning as also specification of the relief sought to be
granted. The position in the National Commission had been no better
and in fact, the Commissions proceeded as if nothing else was required
to be considered because of Dr. Manjeet Kaur Monga’s case.
G
9
Malay Kumar Ganguly had been a case relating to compensation on account of
medical negligence. The referred passage in the said decision reads as under: -
“Indisputably, grant of compensation involving an accident is within the
realm of law of torts. It is based on the principle of restitution in interregnum.
The said principle provides that a person entitled to damages should, as
nearly as possible, get that sum of money which would put him in the same
position as he would have been if he had not sustained the wrong.” H
1150 SUPREME COURT REPORTS [2023] 5 S.C.R.

A In extraordinary measure, money received by respondent
allowed to be retained
27. For what has been discussed hereinabove, the impugned orders
are required to be set aside. However, as indicated, the pertinent factors
are that Dr. Monga’s case related to the very same project and very
B same builder with similar grievance of the complainant. In the said case,
award of compound interest until the date of attempted refund by the
builders has attained finality. In this view of the matter, even while
disapproving the proposition of providing compound interest as such, we
deem it appropriate to take into consideration, only for the purpose of
the present case, the other requirements of balancing the equities.
C
27.1. For the peculiar factors of the present case, we are inclined
to examine the matter with reference to the alternative submission on
the part of the appellants that if at all awarding of compound interest
was to be considered, their efforts to make refund of the sum of Rs.
10,68,031/- on 08.11.2005 by way of a cheque cannot be ignored. It has
D been argued in this regard on behalf of the respondent that the said
cheque was promptly returned by the respondent and accepted by the
appellants. Such return of cheque by the respondent and acceptance by
the appellants is not decisive of the matter. The relevant aspect of the
matter is that the appellants indeed attempted to refund the said sum of
E Rs. 10,68,031/- on 08.11.2005. Even if the respondent was within her
right to decline the offer, in our view, if at all compounding of interest
was to be allowed, that could not have run beyond 08.11.2005, at least in
regard to the said sum of Rs. 10,68,031/-. Put in other words, even when
we may not find fault with stance of the respondent in refusing to accept
such an offer of refund, particularly when she was desirous of the flats
F rather than money refund, the appellants cannot be saddled with any
liability to pay compound interest over the amount offered by them beyond
the date of their offer. The Consumer Fora have failed to consider that
when the appellants had indeed offered to pay the money and sent the
cheque on 08.11.2005, it would be bringing about negative imbalance if
G such an effort on the part of the appellants was to be ignored altogether
and compounding of interest was continued beyond 08.11.2005.
27.2. When the amount payable by the appellants with reference
to the principles and propositions aforesaid is calculated, in our view, it
does not exceed the amount of Rs. 2,48,52,000/- together with accrued
H interest, which has already been received by the respondent pursuant to
M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1151
MERCHANT [DINESH MAHESHWARI, J.]

the order passed by this Court on 09.05.2022. Keeping in view the peculiar A
circumstances of this case, as an extraordinary measure, we propose to
allow the respondent to retain the amount so received.
27.3. However, we would hasten to observe that the respondent
is being allowed to retain the sum of money already received by her only
because of peculiar circumstances of this case and else, this relaxation B
for the respondent is in no manner to be read as approval of the orders
impugned or approval of the proposition of awarding compound interest
in these matters. As said and iterated hereinbefore, such a proposition of
awarding compound interest in these matters by the Fora exercising
jurisdiction under the Act of 1986 stands disapproved.
C
Conclusion
28. Accordingly and in view of the above, these appeals succeed
and are allowed. The impugned orders passed by the State Commission
and National Commission are disapproved. Having regard to the peculiar
circumstances of this case, the amount already received by the respondent D
in the sum of Rs. 2,48,52,000/- together with accrued interest is allowed
to be retained by her but, we make it clear that the appellants shall not
be required to make any further payment to the respondent, whether
towards refund or towards compensation or towards interest. The parties
are left to bear their own costs of these appeals.
E

Nidhi Jain Appeals allowed.
(Assisted by : Rakhi, LCRA)

F

G

H