ORDER

JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)

The learned counsel for respondent/complainant booked a residential flat with the appellant company in the project namely Omaxe Cassia, which the appellant company was to develop at New Chandigarh, Mullanpur in District Mohali.  The possession, as per the agreement between the parties was to be delivered within 24 months from the date of allotment letter, had been issued on 23.12.2012.  The appellant company was however also entitled a grace period of 6 months.  Thus, the possession ought to have been delivered by 29.06.2015.  The possession having not been offered by the aforesaid date, the complainant approached the concerned State Commission by way of a consumer complaint.

2.      The complaint was resisted by the appellant company on several grounds, but it was not disputed that the possession of the flat allotted to the complainant had not been offered to her.  The State Commission vide its order dated 05.05.2017 directed the appellant as under:

1. “To refund the amount of Rs.52,81,803/-, to  the  complainant, alongwith interest @12% p.a.,  from the respective  dates  of  deposits onwards.

2. To pay compensation, in the sum of Rs.2 lacs, for causing mental agony and physical harassment, to the complainant, as also escalation in prices.

3. To pay cost of litigation, to the tune of Rs.50,000/-, to the  complainant.

4. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of two (2) months from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall carry penal interest @15% p.a. instead of @12%, from the respective dates of deposits onwards, and interest @15% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of the complaint, till realization.”

    

   3.      Being aggrieved from the order passed by the State Commission, the appellant company is before this Commission by way of this appeal.  Since complainant has not challenged the order passed by the State Commission, the only issue involved in this appeal is with respect to the quantum of compensation to be paid to the complainant alongwith refund of the principal amount paid by her.

   4.      Admittedly, no evidence was led before the State Commission by the complainant to prove the actual aggregate loss suffered by her on account of the failure of the appellant company to deliver the possession of the flat booked by her.  Her counsel however states that she had taken loan from Syndicate Bank, Sector – 36, Chandigarh, to the extent of ₹30 lacs @ 9.70%, compounded interest monthly.  Broadly, the monthly interest at the aforesaid rate of interest would come to simple interest @ 12% per annum.  However, not the entire amount of about ₹55 lacs inclusive service tax paid by the complainant to the appellant company was raised by way of loan from Syndicate Bank, Sector – 36, Chandigarh.  Considering the fact that out of the total amount paid to the appellant company, about ₹25 lacs was contributed by respondent/complainant from her own resources and also taking into consideration the interest rate prevalent on the fixed deposits during the relevant period, it appears to me that the compensation in the form of interest @12% per annum from the date of each payment till date of refund without any specific compensation towards mental agony and without any cost of litigation will meet the ends of justice and would suitably compensate the complainant on account of the default on the part on the appellant company.  The impugned order is, therefore, modified to the extent that appellant company shall refund the entire amount inclusive service tax, which it has received from the complainant to her, alongwith compensation in the form of simple interest @12% per annum from the date of each payment till the date of which the entire amount in terms of this order is refunded to her.  It is further directed that the payment in terms of this order shall be made by the appellant company within four months from today.  The appellant shall first pay the entire amount payable by the complainant to Syndicate Bank, Sector – 36, Chandigarh as on 31.07.2017.  The aforesaid amount as payable on 31.07.2017 shall be conveyed by the complainant to the appellant within two weeks.   After making payment of the aforesaid amount to the bank, the balance amount shall be paid to the complainant within four months from today.  On receipt of the entire amount, in terms of this order, the complainant shall submit NOC from the bank to the appellant alongwith the original documents executed by her with the appellant company within two weeks.

   5.      On perusal of the impugned order, I find that in its decision dated 15.12.2016 in Surjit Singh Thadwal Vs. M/s. Emmar MGF Land Pvt. Ltd. & Anr., the State Commission, inter-alia, took the following view:-

“Now we will deal with another contention of the opposite parties that for want of pecuniary jurisdiction, it is not open to this Commission to entertain and adjudicate this complaint.  As per admitted facts, the complainant has sought refund of amount paid i.e. Rs.48,95,264/- alongwith interest @12% p.a. from the respective date of deposits; compensation to the tune of Rs.5 lacs, for mental agony and physical harassment and cost of litigation to the tune of Rs.55,000/-. It is argued by Counsel for the opposite parties that if his entire claimed amount is added, alongwith interest claimed, it will cross Rs.1 crore and  in that event it will not be open to this Commission to entertain and adjudicate this complaint, for want of pecuniary jurisdiction. To say so, reliance has been placed upon ratio of judgment of a Larger Bench of the National Commission, in the case of Ambrish Kumar Shukla (supra). In the said case, it was specifically observed that when determining pecuniary jurisdiction of the Consumer Foras, it is the value of the goods and services, which has to be noted and not the value of deficiencies claimed. Further, that interest component also has to be taken into account, for the purpose of determining pecuniary jurisdiction.

“In the first blush, if we look into the ratio of the judgment, referred to above, it appears that this Commission will not have pecuniary jurisdiction to entertain this complaint.  However, on deep analysis, we are going to differ with the argument raised by Counsel for the opposite parties.  Judgment in the case of Ambrish Kumar Shukla (supra) was rendered by Three Judges Bench of the National Commission, without noting its earlier view of the subject. This issue, whether, when determining pecuniary jurisdiction of the State Commission/ Consumer Foras, interest is to be added with other relief claimed or not, came up for consideration, before the Three Judges Bench of the National Commission in Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. And Ors., II 2003 CPJ 81 (NC). In the said case, noting similar arguments, it was observed as under:-

“3. Complaint (at pp 17-36) was filed with the following prayer :

“It is, therefore, respectfully prayed that the complaint be allowed and the opposite parties be directed to pay the claim to the tune of Rs. 18,33,000/- plus interest @ 18% from the date of claim till its realization. Also the suitable damages caused to the complainant be ordered to be paid to the complainant.”

4. Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period upto the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs. 18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission.” 

It was specifically stated that interest claimed by appellant/complainant pertained to the period upto the date of filing complaint, pendente lite and future, need not be added in the relief claimed, to determine pecuniary jurisdiction of the State Commission/Consumer Foras. It was rightly said that the rate and period for which the interest has to be allowed, is within the discretion of the particular Consumer Fora, and the stage for exercise of such discretion would be the time, when final order is passed. We are of the considered opinion that the view taken is perfectly justified. There may be cases, where the complainant may not be entitled to claim any interest upon the amount paid, like the one, where he is rescinding his contract and  further at what rate interest is to be granted will be determined by the competent Consumer Fora, by looking into the facts of each case. All cases cannot be put into a straitjacket formula, to add interest claimed, to determine pecuniary jurisdiction of the Consumer Foras. The interest, which is a discretionary relief, cannot be added to the value of the goods or services, as the case may be, for the purpose of determining the pecuniary jurisdiction of the Consumer Foras. As per provisions of the Consumer Protection Act, 1986 (Act) value of the goods purchased or services plus (+) compensation claimed needs to be added only, for determining pecuniary jurisdiction of the Consumer Foras.

As per ratio of the judgment of the Supreme Court in the case of New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd., Civil Appeal No.10941-10942 of 2013, decided on 04.12.2015, we would like to follow the view expressed by Three Judges Bench (former Bench) of the National Commission in Shahbad Cooperative Sugar Mills Ltd. case (supra), in preference to the ratio of judgment passed by a Bench of co-equal strength (subsequent Bench) of the National Commission in the case of Ambrish Kumar Shukla case (supra).

In New India Assurance Co. Ltd. case (supra), it was specifically observed by the Supreme Court that when a former Bench of co-equal strength has given a finding qua one legal issue, it is not open to the subsequent Bench of co-equal strength to opine qua that very legal issue and give a contrary finding. At the maximum, the subsequent Bench of co-equal strength can refer the matter to the President/Chief Justice of India to constitute a bigger Bench, to look into the matter and reconsider the legal proposition. It was further specifically held that, in case, there are two contrary views by the former and later co-equal strength Benches, the former will prevail. It was so said by looking into the ratio of judgment rendered by the Five Judges Bench of the Supreme Court of India, in Central Board of Dawoodi Bohra Community & Anr. Vs. State of Maharashtra & Anr. (2005) 2 SCC 673, wherein, when dealing with similar proposition,  it was observed as under:-

“12. Having carefully considered the submissions made by the learned senior counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms :- 

(1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength. 

(2) A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion  doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted. 

(3) The above rules are subject to two exceptions: (i) The abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and 

(ii) In spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of Chief Justice constituting the Bench and such listing. Such was the situation in Raghubir Singh and Hansoli Devi.” 

In Ambrish Kumar Shukla case (supra), ratio of judgment-Shahbad Cooperative Sugar Mills Ltd. (supra) was not even discussed and considered. In view of above proposition of law laid down by the Five Judges Bench in Central Board of Dawoodi Bohra Community & Anr.`s and also Three Judges Bench of the Supreme Court, in New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd. case (supra), it is not open to the Bench of co-equal strength to give contrary findings, to the view already expressed by a Former Bench of same strength. In Shahbad Cooperative Sugar Mills Ltd. case (supra), decided on 02.04.2003, it was specifically observed by Three Judges Bench of the National Commission that when determining pecuniary jurisdiction of the Consumer Foras, interest component claimed by the complainant/party, is not to be added. We are of the considered view that in view of proposition of law, as explained above, the view taken in Shahbad Cooperative Sugar Mills Ltd. case (supra), to determine pecuniary jurisdiction without taking interest claimed, will prevail. As such, in the present case, we are not looking into the interest claimed by the complainant, when determining pecuniary jurisdiction of this Commission.  If the interest part is excluded, the amount claimed in the relief clause fell below Rs.1 crore and above Rs.20 lacs. Hence, this Commission has pecuniary jurisdiction to entertain and decide the present complaint. In view of above, the objection raised by the opposite parties, in this regard, being devoid of merit, must fail and the same stands rejected.”

6.      Thus, the State Commission took the view that the decision rendered by a three-Members Bench of this Commission in CC No.97 of 2016 Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd., was per-incuriam, the same having been rendered without considering the earlier decision of a three-Members Bench of this Commission in Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. And Ors. (supra).

7.      In Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd. (supra), this Commission had inter-alia observed and held as under:

“In Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65, the Hon’ble Supreme Court inter-alia observed and held as under:

“However the power to and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum.  As seen above what is being awarded is compensation i.e. recompense for the loss or injury.

… Along with recompensing the loss the Commission / Forum may also compensate for harassment / injury both mental and physical.  Similarly, compensation can be given if after allotment is made there has been cancellation of scheme without any justifiable cause.

That compensation cannot be uniform and can best of illustrated by considering case where possession is being directed to be delivered and cases where only monies are directed to be returned.  In cases where possession is being directed to be delivered 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 returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat / plot.  He is being deprived of that flat / plot.  He has been deprived of the benefit of escalation of the price of that flat / plot.  Therefore, the compensation in such cases would necessarily have to be higher”.

The Hon’ble Supreme Court thus recognized that the interest to the flat buyers is paid by way of compensation.  In fact, though the Consumer Protection Act, authorises the Consumer Forum to award compensation, no specific powers to award interest has been conferred upon it.  Therefore, in view of the provisions contained in Sections 21, 17 and 11 of the Consumer Protection Act, the amount of the interest, which can be paid as compensation, must necessarily be taken into account for determining the pecuniary jurisdiction.”

It would thus be seen that the view taken by this Commission that interest to the flat buyers is paid by way of compensation, is based upon the binding decision of the Hon’ble Supreme Court in Ghaziabad Development Authority vs. Balbir Singh (supra).  In fact, in Balbir Singh (supra), the Hon’ble Supreme Court had also observed as under:

“It is clear that in all these cases interest is being awarded as and by way of compensation/damages.  Whilst so awarding it must be shown that there is relationship between the amount awarded and the default/unjustifiable delay/harassment.”

8.      Recently, in Chief Administrator HUDA Vs. Shakuntala Devi, Civil Appeal No. 7335 of 2008 decided on 08.12.2016, a Three-Members Bench of the Hon’ble Supreme Court upheld the award of compensation by way of interest in a case where the builder had failed to deliver possession of the plot booked by the complainant to her.  In passing the aforesaid decision, the Hon’ble Supreme Court inter-alia relied upon its earlier decision in Ghaziabad Development Authority vs. Balbir Singh (supra).

9.      Since the decision of this Commission in Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd. (supra) was based upon the binding decision of the Hon’ble Supreme Court in Ghaziabad Development Authority vs. Balbir Singh (supra), it cannot be said to be per-incuriam even if the earlier decision by a three-Members Bench of this Commission in Shahbad Cooperative Sugar Mills Ltd. Vs. National Insurance Co. Ltd. And Ors. (supra), was not brought to the notice of the Bench which rendered the decision in Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd. (supra).  Therefore, the view taken by the State Commission is wholly erroneous and consequently it is held that the decision rendered by this Commission in Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd. (supra) is not per-incuriam.  The aforesaid decision is, therefore, binding not only on the Fora below but also on the other Benches of this Commission, unless it happens to be a Larger Bench.

          The present appeal is disposed of accordingly with no order as to costs.  One copy of this order be sent to the concerned State Commission, for information.