Skip to main content

Builder liable to pay interest on booking amount even in the absence of agreement

In VIVEK KISHORCHANDRA MEHTA vs PURANIK BUILDERS PVT. LTD. & ANR., this appeal was filed by the appellant against the order of dismissal of the complaint by the State Consumer Disputes Redressal Commission, Maharashtra.  

The complainant alleged that an amount of Rs.40,00,000/- were paid as booking advance on 25.4.2014.  However, the complainants came to know on 22.3.2015 that there was no three BHK flat in the project though the booking was made for three BHK flat.  Accordingly, the complainants objected to issue of any allotment letter by the opposite parties and sought refund of the paid amount.  Opposite parties agreed to repay on current market price or atleast 18% p.a. interest on the paid amount.  The actual amount was refunded from August, 2015 to October, 2015.  However, no interest has been paid by the opposite parties though the money remained with opposite parties for over a year. 

The State Commission mentioned that the amount of refund was received by the complainants without any protest, and concluded that the relationship of the complainants with the opposite parties as consumer and service provider ended when the paid amount was refunded by the opposite parties to the complainants. 

The NCDRC decided that the question is even if the agreement is cancelled and one party is aggrieved by non-implication of that agreement/understanding, Consumer Protection Act allows the consumer to file complaint within a period of two years and in the present case the complaint has been filed within a period of two years.  Hence, the finding of the State Commission does not stand on a firm legal footing.  So far as the question of protest by the complainants while receiving the amount is concerned, any protest on their part would have denied them the benefit of receiving the amount of refund and the prudence at that time demanded that they should first accept the refund and later claim for interest. Hence, both the grounds on which the complaint has been dismissed by the State Commission are not sustainable.

Coming to the question of interest, the NCDRC referred to the judgment of Hon’ble Supreme Court in Alok Shanker Pandey Vs. Union of India where the Apex court said that it may be mentioned that there is misconception about interest.  Interest is not a penalty or punishment at all, but it is the normal accretion on capital.  For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount.  Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period.  Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B. it is clear that if money has remained for some time with the opposite parties, they are liable to pay some interest on that amount.

Comments

Post a Comment

Most viewed this month

Court approached in the early stages of arbitration will prevail in all other subsequent proceedings

In National Highway Authority of India v. Hindustan Steelworks Construction Limited, the Hon'ble Delhi High Court opined that once the parties have approached a certain court for relief under Act at earlier stages of disputes then it is same court that, parties must return to for all other subsequent proceedings. Language of Section 42 of Act is categorical and brooks no exception. In fact, the language used has the effect of jurisdiction of all courts since it states that once an application has been made in Part I of the Act then ―that Court alone shall have jurisdiction over arbitral proceedings and all subsequent applications arising out of that agreement and arbitral proceedings shall be made in that Court and in no other Court. Court holds that NHAI in present case cannot take advantage of Section 14 of the Limitation Act, 1963 for explaining inordinate delay in filing present petition under Section 34 of this Act in this Court.
Post a Comment
Read more

No Rebate For Stamp Duty Paid In Another State - Bombay HC

A three judge bench of the Hon'ble Bombay High Court (Bombay HC) in a recent judgment in the matter of Chief Controlling Revenue Authority, Maharashtra State, Pune and Superintendent of Stamp (Headquarters), Mumbai v Reliance Industries Limited, Mumbai and Reliance Petroleum Limited, Gujarat1 has held that orders in case of a scheme of arrangement under Section 391 to 394 of the Companies Act, 1956 (Act) involving different High Courts in multiple states, are separate instruments in themselves. Accordingly, stamp duty would be payable on all the orders (and consequently, all the states) without the benefit of remission, rebate or set-off.
Post a Comment
Read more

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more