Complainants as well as the Opposite Party before the State Commission have filed these appeals against the judgment and order dated 30.3.2007 passed by the State Consumer Disputes Redressal Commission, UT Chandigarh (in short, ‘the State Commission’) in Complaint No.68/06 whereby the State Commission partly allowing the complaint has directed the Opposite Party, Chandigarh Housing Board, to pay interest @ 16.5% on the amount of Rs.2,70,000/- deposited by the Complainants. Rs.1,00,000/- were awarded towards compensation for mental agony in addition to Rs.20,000/- as costs.

FACTS:-

            Chandigarh Housing Board (hereinafter referred to as the ‘Housing Board’) published a housing scheme called ‘1989 Self Financing Scheme for category of I & II at modern housing complex, Manimajra’ in various newspapers. Smt. Bhagwanti Khanna, grandmother of the Complainants applied for a flat in Category II in the said scheme vide application No.7299 dated 8.7.89 under physically handicapped quota. She was issued letter of intent on 09.04.90 and acceptance-cum-demand letter on 3.1.91 by the Housing Board. 

The Housing Board suo motu raised the price of flat from Rs.3,00,000/- to Rs.4,75,000/- which was challenged by the allottees including Smt. Bhagwanti Devi by filing writ petition No.15288/1992 titled Hem Raj Bansal & Ors. Vs. Chandigarh Administration in which stay was granted on recovery of enhanced price by the Division Bench on 20.11.92.  Ultimately the writ petition was dismissed on 2.06.93 by observing, thus:-

“There is ample material on record that the price indicated in the brochure/letter of acceptance was tentative.  The Petitioners appear to have given undertaking also to pay the price as finally worked out at the time of allotment.  The whole of the discussion before us centred rond the main question – whether notice Annexure P-3 was arbitrary.  Mr. Sarin did not even once suggest in the course of the arguments that the petitioners were entitled to possession of the flats on the original price and that the Board was not entitled to any increase whatsoever.  We, therefore, dispose of these connected writ petitions by setting aside Annexure P-3.  It will be open to the Board to take further action in accordance with the terms and conditions of the contract in question. “

Smt. Bhagwanti Devi died during the pendency of the writ petition and by virtue of registered ‘Will’ dated 7.8.90 left by her, complainants were substituted as her legal representatives in the writ petition.  Complainants applied to the Housing Board for transfer of the flat in their favour.  Housing Board did not transfer the flat and asked the complainants to get the ‘Will’ probated.  Complainants filed civil suit which was decreed on 26.05.04 after remand by the appellate authority. On production of the Civil Court order, Housing Board issued the letter of allotment in the name of the complainants on 22.5.05. Complainants were asked to pay a sum of Rs.5,33,871/- towards balance consideration including the interest @16.5% p.a.. Complainants paid the amount and, thereafter, filed the complaint. Complainants allege that they have been made to pay Rs.7,90,000/- for the flat which was sold to other allottees for Rs.4,33,000/-. They also claimed interest on the deposited amount of Rs.2,70,000/- which remained with the Housing Board for about 10 years.

          Housing Board, on being served, entered appearance and filed its written statement resisting the complaint, inter-alia, on the grounds; that the price of the flat could be increased due to variation in plinth area, scope of work, change in specifications and design, increase in cost of material and labour, cost of land, etc., or due to any other reason and the same was binding on the allottee;  that the detailed terms and conditions were mentioned in Annexure C-3 of the housing scheme; that the Senior Law Officer of the Board had opined that the party should be asked to get the ‘Will’ probated and accordingly the probate of ‘Will’ was demanded from the complainants; that there was no deficiency in service on their part.

The State Commission, after scanning the material on record and after going through the evidence led by the parties, came to the conclusion that there was delay on the part of Housing Board in transferring the flat and giving possession to the complainants for which they were entitled to interest on the amount deposited by them.  However, State Commission held that the complainants were not entitled to any relief for the interest charged by the Housing Board on the balance consideration. Accordingly, State Commission partly allowed the complaint and directed the Housing Board to pay interest @ 16.5% on the amount of Rs.2,70,000/- deposited by the complainants. Rs.1,00,000/- were awarded towards compensation for mental agony in addition to Rs.20,000/- as costs.

State Commission observed, thus :-

“The increase in price of flat was as per terms of allotment letter, acceptance letter and the brochure and otherwise also, fora cannot go into the question of pricing of flats.  It is true that complainants to their predecessor had paid Rs.2,70,000/- till 10.6.92 but they did not pay the balance amount and as such opposite party was entitled to charge interest @ 16.5% as per allotment letter.  However, OP had kept the amount of Rs.2,70,000/- which was deposited by the complainants or their predecessor on different dates.  From the date of respective deposits, it will also carry interest @ 16.5% at which rate OP had charged interest till the possession was actually delivered because OP had unnecessarily demanding probate and it took 10 years to transfer the flat in favour of the complainants and during that period they had to undergo mental agony and had to suffer loss.  There is no copy of judgment of High Court on file that the increase in price had been quashed by it but only it is mentioned in the complaint that stay was granted against recovery but no copy of the order has been placed on record to show that the writ petition had been decided in one way or the other.  In such circumstances, OP was justified in increasing the price.  The total price fixed by OP of category-II flat was at Rs.7,90,000/- the details of which had been given in Annexure R-8 and R-9.  The copy of letter dated 7.3.05 issued by Ranbir Khanna, father of complainants which is annexure C-16 shows that he had not raised any objection regarding payment of balance amount but the only raised objection that OP was slow in informing the amount to be deposited as balance amount which it should have disclosed at the earliest, so that possession could be taken.  After depositing the amount of Rs.5,33,871/-, the attorney of the complainants wrote letter dated 6.6.05 for giving detail of cost of flat of Rs.7,90,000/-.  It is also mentioned in it that delay in depositing balance amount was due to the fact that OP had refused to transfer the flat in the name of complainants.  The flat was allotted in the name of Smt. Bhagwanti Devi.  It was a question of procedural matter in whose favour the flat was to be transferred but it was incumbent upon on the part of complainants as legal representatives of Smt. Bhagwanti Devi to deposit the balance price of the flat in time.  If they had failed to pay the same, certainly they were liable to pay the interest.

Since, there was delay in transferring the flat in favour of complainants and giving possession, so, in view of authority of Hon’ble Apex Court titled GDA Vs. Balbir Singh – II (2004) CPJ012 the complainants are granted interest @ 16.5% on the amount of Rs.2,70,000/- from the date of various deposits till the delivery of possession on 9.1.06.  Complainants are not entitled to any amount on account of overcharging qua other allottees or costs of litigation of civil suit or rental income as there are indirect losses.”

Feeling aggrieved by the order passed by the State Commission, both the parties filed the appeals. First Appeal No.277 of 2007 has been filed by the complainants seeking enhancement of the compensation and refund of the amount charged by the Housing Board by way of interest on the balance amount of consideration whereas First Appeal No.306 of 2007 has been filed by the Housing Board seeking setting aside of the impugned order.

Counsel for the parties have been heard at length.

First Appeal No.277 of 2007

Ld. Counsel appearing for the complainants (Appellants herein) contends that the Appellants had been made to pay Rs.7,90,000/- for the flat which was sold to other allottees at Rs.4,33,000/-. That the Housing Board (respondent herein) had charged interest on the balance amount for 10 years without any justification.  That the Appellants were always ready and willing to pay the balance amount but because of the action of the Housing Board in demanding the succession certificate which was not necessary at all, the possession was not handed over resulting in denying the use/usufruct of the property and that the appellants were made to pay interest @16.5% p.a. on the balance amount of consideration.

As against this, Ld. Counsel appearing for the Housing Board submits that out of total consideration of Rs.4,33,000/-, the Appellant had paid only Rs.2,70,000/- and in terms of the agreement entered into between the parties and the Rules framed by the Housing Board, the Housing Board was entitled to claim interest on the balance amount of consideration. That there was no deficiency in service on the part of the Housing Board as the alleged ‘Will’ dated 7.8.90 was executed bypassing the natural course of succession and excluding certain Class I heirs.  That the Housing Board was justified in asking the Appellants to get the Will probated for transfer of the flat in their favour.

We find substance in the submissions made by the Ld. Counsel for the Housing Board. The Appellants had not paid the entire consideration for the flat.  As per terms of the agreements and the Rules framed by the Housing Board, the Housing Board was entitled to charge interest for the delayed payment of the consideration amount. The Appeal filed by the complainants is dismissed.

FIRST APPEAL NO. 306 OF 2007

          This Appeal has been filed by the opposite party-Chandigarh Housing Board seeking setting aside of the direction to pay interest @ 16.5% p.a. on the sum of Rs.2,70,000/- deposited by the Complainants (respondents herein) and the compensation amount of Rs.1,00,000/-. By the impugned order the appellant Housing Board has been directed to pay interest @16.5% p.a. on the sum of Rs.2,70,000/-  on the ground that there was delay on its part in transferring the flat and giving the possession of the flat to the Respondents. Initially, the flat was offered to the grandmother of the Respondents for a consideration of Rs.3,00,000/- which was enhanced to Rs.4,75,000/-  by the Housing Board. Instead of paying the said amount, grandmother of the Respondents chose to file a writ petition in the High Court challenging the enhancement in the price. The High Court granted stay.  After the decision in the writ petition the Housing Board re-worked the cost and fixed the same at Rs.4,33,000/-.  Grandmother of the Respondents died.  She left ‘Will’ in favour of the Respondents to the exclusion of their father, uncle, i.e. father’s brother and six sisters of the father of the Respondents.  Since, course of natural succession had been changed and certain Class I heirs had been excluded from inheriting the property, the Senior Law Officer of the Housing Board, in order to avoid any future complications, advised the Department to ask the Respondents to get the ‘Will’ probated before transferring the property in their favour.  Respondents got the Civil Court’s decree in their favour on 26.5.2004. On production of the certified copy of the Civil Court’s decree, the Housing Board immediately issued the letter of allotment in favour of the Respondents on 22.5.2005 and asked them to pay the balance amount of consideration along with interest to enable them to hand over the possession of the flat. Respondents deposited the said amount sometime in Aug./Sept.2005 and the possession of the flat was handed over to them on 09.01.06. There was no delay on the part of the Housing Board either in allotting the flat or handing over the possession of the flat after payment of the balance amount of consideration.  In our considered opinion, the Senior Law Officer was justified in asking the Respondents to get the ‘Will’ probated as certain Class I heirs had been excluded to inherit the property. The flat has been given to the Respondents at the old price.  Since there was no delay either in allotting the flat after the passing of the decree or in handing over the possession on the payment of the balance amount of consideration, the State Commission erred in awarding interest on the sum of Rs.2,70,000/- deposited with the Housing Board by the Respondents.

Appeal is allowed and direction given by the State Commission to the Housing Board to pay interest @ 16.5% p.a. on the sum of Rs.2,70,000/- deposited by the Respondent is set aside. The cost of Rs.20,000/- awarded by the State Commission is also set aside. However, we are not inclined to set aside the direction to pay Rs.1,00,000/- as compensation to the Respondents as the Respondents had to face protected litigation in the Civil Court and Consumer Fora.

          For the reasons stated above, First Appeal No.277/07 filed by the complainants is dismissed and the First Appeal No.306/07 filed by the Housing Board is partly allowed to the extent indicated above. There shall be no order as to costs.