The National Consumer Disputes Redressal Commission, chaired by Mr. Subhash Chandra and AVM J. Rajendra, ruled that refunded amounts should be paid with interest from the date of deposit, ensuring that compensation is both restitutionary and compensatory.
Case Summary
The complainant booked a flat with the Punjab Urban Planning & Development Authority (PUDA) and paid ₹3,00,000 as earnest money. After being allotted a plot, he paid an additional 15% of the total amount. However, the developer failed to start development or deliver possession within the promised timeframe. Despite repeated requests, the developer did not meet its obligations, leading to harassment and mental distress for the complainant. The complainant filed a complaint with the District Commission, seeking ₹7,50,000 with 18% annual interest and ₹1,00,000 for mental anguish due to the service deficiency. The District Commission ruled in favor of the complainant, but the developer appealed to the State Commission of Punjab, which upheld the original decision. The developer then filed a revision petition with the National Commission.
Developer’s Contentions
The developer claimed that the plot was allotted on an “as is where is” basis through a draw, as specified in the brochure. They argued that disputes should be referred to the Chief Administrator of PUDA as per the Letter of Intent, thus excluding the Forum’s jurisdiction. The developer also accused the complainant of concealing facts and argued that the complaint was barred due to the complainant’s own actions. They contended that the case involved complex legal and factual issues unsuitable for summary resolution under the Act. Although they acknowledged the complainant’s payment of 15% of the sale price, they claimed that a contractor had been appointed for development work. The developer argued that the complaint was time-barred and sought its dismissal.
National Commission’s Observations
The National Commission focused on determining the appropriate compensation and interest for the refund due to the complainant. The Supreme Court, in Experion Developers Pvt. Ltd. vs Sushma Ashok Shiroor, clarified that interest on refunded amounts should be calculated from the date of the original deposits to ensure full restitution. Interest granted only from the date of the last deposit does not achieve complete restitution. Following this precedent, the Commission allowed the revision petition and revised the earlier orders from the District Forum and State Commission. The developer was directed to refund ₹4,50,000 to the complainant, with simple interest at 9% per annum calculated from the respective dates of the deposits until payment. Additionally, the developer was ordered to pay ₹40,000 in litigation costs.
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