Petitioner was the opposite party before the District Forum.

                Respondent/complainant was allotted plot NO.D-103, Sector 5 Shatabdi Nagar Yojna, Meerut admeasuring 250 sq. mtrs. by the petitioner for Rs.1,12,500/-. The possession of the plot was to be handed over in the year 1992. As per allegations made in the complaint, respondent paid Rs.1,13,004.60 up to 20.2.2009.  The respondent, on inspection, found that no development work had been carried out at the site.  On enquiry from petitioner, respondent was informed that there was some dispute between the farmers and the petitioner.  Respondent requested for an alternative plot in a developed sector on the price of the earlier allotted plot, which request was declined by the petitioner.  Since the possession of the allotted plot was not handed over, respondent filed complaint before the District Forum.

                Petitioner entered appearance and filed its written statement taking the stand that the respondent had not paid the instalments of the plot in time. A sum of Rs.16,83,305/- inclusive of penal interest and other heads was outstanding against the respondent; that possession could not be handed over due to judicial proceedings; that development work was in progress; that the petitioner was ready to refund the deposited amount.

 District Forum allowed the complaint and directed the petitioner to execute sale deed of the allotted plot in favour of the respondent without recovering any interest or penal interest and hand over possession of the plot within a period of one month.  Petitioner was also directed to pay interest @ 12% on the deposited amount from the date of deposits till handing over of the possession.  Rs.10,000/- were awarded towards mental agony and Rs.5,000/- as costs.

Feeling aggrieved, petitioner filed the appeal before the State Commission.

State Commission partly allowed the appeal.  The direction of payment of interest on the deposited amount was set aside.  Rest of the order of the District Forum was upheld.  Relevant observations of the State Commission are as under :

“It is apparent that as against the commitment of handing over possession to the complainant by 1992, the Authority has taken about 21 years in all to enable itself to fulfill the terms and conditions of the allotment, under the Shatabdi Nagar Scheme. In such a situation the complainant who resides in nearby Delhi was justified in withholding the payment because by inspecting the site he could know the exact position where the Authority was exactly placed in. The Authority being guilty of deficiency in service on its own par! Could not legitimately levy any interest what lo lake of penal rate of interest. It is no doubt true, it would have been better if the complainant would have paid his installment but since there was not development at the site in question his apprehension of has money going waste cannot be said to be unjustified. As said by him and argued by his counsel, he was always ready and willing to pay the price of the plot but because of the delay in development of the site he was apprehensive which led him to withholding of the payment. He however, paid the price of the plot i.e. Rs.1,12,500.00 without incurring the liability of interest as was levyable in the letter of installment. Indeed , we find go justification for levying even an interest soliciting payment by way of  installment as there was a breach of commitment to hand over possession of the plot by the year 1992. The Authority started development work in the year 2009 and the complainant had by then deposited the price of the plot i.e. Rs.1,12,500.00.  In the matter of deficiency of service, we find valuable support from a decision of the Hon’ble National Commission in “Agra Development Authority Vs. Smt. Shailendri” 2009 (1) CPR 35 (NC). It has been laid down in this that the Authority could not have asked for payment of penal interest if there was a deficiency in service on its part. The demand of whopping sum of Rs.22,09,089.00 being demanded by the Authority from the respondent of the appeal in hand includes penal interest. As held above, the Authority is neither competent nor justified to make such payment. The Complainant shall get sale deed executed in his favour on payment of the price he has already paid. However, since, he is getting a valuable plot, the District Forum’s direction holding the Authority liable to pay interest may not be warranted.”

        We agree with the view taken by the State Commission.  Petitioner failed to fulfil its commitment of handing over the possession of the plot to the respondent in 1992.  Respondent was justified in withholding the payment of instalments as the petitioner did not honour its commitment of handing over the possession to the respondent.  Since the petitioner was guilty of deficiency in service, it was not justified in demanding interest/penal interest from the respondent.  Petitioner was totally unjustified in demanding the sum of Rs.22,09,089/- towards penal interest, etc. for a plot of land which was sold to the respondent for a sum of Rs.1,12,500/-.  Direction issued by the District Forum to pay interest on the deposited amount has already been set aside.  No ground for interference is made out.  Dismissed in limine.