1.       Delay condoned.

2.       This First Appeal, under Section 19 of the Consumer Protection Act, 1986 (for short “the Act”), by Greater Mohali Area Development Authority (for short “GMADA”) and its Estate Officer, is directed against the order dated 09.09.2016, passed by the Punjab State Consumer Disputes Redressal Commission at Chandigarh (for short “the State Commission”) in Consumer Complaint No. 183 of 2015. By the impugned order, while allowing the Complaint filed by the Respondent herein, alleging deficiency in service on the part of GMADA in not delivering possession of the residential apartment in Category-A, Type-3 in the Purab Premium Apartments Scheme, launched by them, the State Commission has issued the following directions to GMADA:

“(i)     Pay a sum of Rs.6,90,000/- alongwith interest @ 8% per annum compounded annually;

(ii)     Pay Rs.13,80,000/- alongwith interest @ 8% p.a. compounded annually;

(iii)     Pay Rs.42,60,750/- alongwith interest @ 8% p.a. compounded annually;

from the date of deposit till the date of payment.

(iv)    OPs are directed to pay Rs.2,00,000/- as compensation on account of non-constructing the flats within the prescribed period and forcing the complaint to go for litigation;

(v)     Pay Rs.21,000/- as litigation expenses.”

3.       Since admittedly the possession of the flat in question was not delivered to the Complainant within a period of 36 months from the date of issuance of the Letter of Intent in her favour, exercising her right in terms of Clause-3(II) of the said Letter of Intent, the Complainant sought to withdraw from the Scheme by moving an appropriate application before the Estate Officer of GMADA.  The said prayer for surrender of the apartment was accepted by GMADA vide their email dated 03.07.2015.  The documents sought for were supplied by the Complainant but she was told that she would be entitled to interest on the amount of ₹63,30,750/- deposited by her as consideration for the said flat, only from the committed date of delivery of the flat, i.e. 21.05.2015. 

4.       Being dissatisfied with the said stand of GMADA, the Complainant filed the Complaint before the State Commission, on which the afore-extracted directions have been issued to GMADA.

5.       Aggrieved, GMADA and its Estate Officer are before us in this Appeal.

6.       We have heard learned Counsel for the Appellants and the Complainant, who is on Caveat.

7.       Ms. Issar, learned Counsel appearing for the Appellants, has questioned the legality of the impugned order on two counts, namely, (i) the State Commission was not justified in awarding interest @ 8% p.a. compounded annually from the dates of respective deposits of various amounts by the Complainant; and (ii) the compensation of ₹2,00,000/-, in addition to the direction for payment of interest, is not warranted.

8.       Thus, the first question for consideration is whether in the light of the stipulation of payment of interest on account of delay in delivery of possession of the apartment beyond a period of 36 months, the Complainant is entitled to interest from the respective dates of deposits towards the sale consideration or interest has to be paid only for the period commencing after the expiry of 36 months.

9.       For the sake of ready reference, the relevant Clause in the letters of interest is extracted below:

“3.     OWNERSHIP AND POSSESSION

1. Allotments shall be on free hold basis.

    

2. Possession of apartment shall be handed over after completion of development works at site in a period of 36 months from the date of issuance of Letter of Intent.In case for any reason, the Authority is unable to deliver the possession of apartments within stipulated period, allottee shall have the right to withdraw from the scheme by moving an application to the Estate Officer, in which case, the Authority shall refund the entire amount deposited by the applicant along with 8% interest compounded annually.Apart from this, there shall be no other liability of the Authority.”

    

   10.     It is evident from a bare reading of the Clause that in the event of non-completion of the development work at site within the stipulated period of 36 months, an Allottee is entitled to withdraw from the Scheme and, if he chooses to do so, GMADA is obliged to refund the entire amount deposited by the Allottee, along with interest @ 8% compounded annually.  The stand of GMADA that it is liable to pay interest in terms of the said Clause only after the expiry of 36 months, in our view, is not only tantamount to unfair trade practice, as defined in Section 2(1)(r) of the Act, it would wholly be unequitable on the part of a public oriented department of the State.  It is clear from the Clause that its object is to mitigate the loss suffered by an applicant on account of locking of his funds with GMADA towards the cost of the flat, by payment of nominal interest @ 8% compounded annually because it has failed to complete the development work at the site within a period of 36 months.  Having used an Allottee’s money, who might have borrowed it from Bank or any other source, on interest, as in the present case, and having failed to deliver possession of the property within the stipulated time, GMADA cannot be permitted to arrogate to itself an arbitrary power to withhold the Applicant’s money for three years free of any interest.  In that view of the matter, we are unable to accept the stand of GMADA that its obligation to pay interest at the said rate starts only after the expiry of 36 months.

   11.     The question surviving for consideration is as to whether the State Commission is justified in awarding a compensation of ₹2,00,000/- in favour of the Complainant on account of non-construction of the flat within the stipulated period?  Supporting the impugned direction, it is vehemently submitted by learned Counsel appearing on behalf of the Complainant that the said direction has been issued by the State Commission, taking into consideration the fact that on receipt of the Letter of Intent, after seeking permission from GMADA, the Complainant had mortgaged the flat for raising loan for deposit of the sale consideration for the flat.  It is stated at the bar by learned Counsel appearing for the Complainant that in the affidavit filed by way of evidence by the Complainant in the State Commission, which document, unfortunately, has not been placed on record by the Appellant with this Appeal, it was specifically stated that the rate of interest charged by the Bank on the loan disbursed to the Complainant was @ 10.75% and, therefore, it cannot be said that the award of compensation of ₹2,00,000/- to the Complainant, in addition to interest @ 8%, is unreasonable or excessive.

   12.     We find substance in the submission made on behalf of the Complainant.  As noted above, admittedly, the flat could not be constructed by GMADA within a period of 36 months, as stipulated in the Scheme, and the amount(s) towards sale consideration, amounting to ₹66,03,835/-, a substantial part whereof being from an interest bearing loan from the Bank, commencing from 04.01.2012, remained with GMADA all through.  Therefore, the award of interest @ 8% in favour of the Complainant is of no solace to her for the aforesaid delay in completion of the flat allotted to her and for the mental agony and harassment suffered by her.               

13.     For the aforesaid reasons, we do not find any material illegality, legal or factual, in the impugned order, warranting our interference.  Consequently, the Appeal fails and is dismissed accordingly, with no order as to costs.