REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 4910-4941 / 2019

(@ SLP(C) Nos. 3623-3654 OF 2019)

DLF HOMES PANCHKULA PVT. LTD …… APPELLANT

vs.

D.S. DHANDA, ETC.ETC. .…..RESPONDENTS

WITH

CIVIL APPEAL NOS. 4942-4945 2019

(@ SLP(C) Nos. 4363-4366 OF 2019)

DLF HOMES PANCHKULA PVT. LTD. & ANR. …… APPELLANTS

vs.

SUDESH GOYAL, ETC. .…..RESPONDENTS

J U D G M E N T

Hemant Gupta, J.

CIVIL APPEAL NOS.4910-4941 OF 2019

(@ SLP(C) Nos. 3623-3654 OF 2019)

Leave granted.

2. The present appeals are directed against orders dated

24.10.2018 & 12.12.2018 passed by the National Consumer Disputes

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Redressal Commission

1

disposing 16 First Appeals wherein the appeals

filed by the Appellant were decided by partially modifying the order

passed by the State Consumer Disputes Redressal Commission

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on

02.06.2016 wherein SCDRC directed the Appellant to hand over the

physical possession of the units allotted to the respondents

(Complainants), complete in all respects within a period of four

months. However, for facility of reference, facts are taken from the

complaint filed by Shri D.S. Dhanda. The SCDRC issued the following

directions:

“Consumer Complaint bearing No. 94 of 2016,

titled as D.S. Dhanda Vs DLF Homes Panchkula

Private Limited and anr. The opposite parties are

jointly and severally directed as under:-

1.To hand over physical possession of the unit,

allotted in favour of the complainant, complete

in all respects, as per the terms and conditions

of the Agreement, to the complainant, within a

period of four months, from the date of receipt

of a certified copy of this order, on payment of

the amount, legally due against him.

2.To execute and get registered the sale deed, in

respect of the unit, in question, within one

month from the date of handling over

possession, as indicated in Clause (i) above, on

payment of registration charges and stamp

duty, by the complainant, directly to the

Registering Authorities concerned.

3.To pay compensation, by way of interest @ 12%

p.a., on the deposited amount, to the

complainant, from 10.02.2014(promised date in

view of the extension sought vide letter dated

05.06.2013 i.e. 12 months after the stipulated

date as per Agreement i.e. from 10.02.2013) to

31.05.2016, within 2 months, from the date of

1 NCDRC

2 SCDRC

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receipt of a certified copy of this order, failing

which, the said amount shall carry penal

interest @ 15% p.a. instead of 12% p.a., till

realization.

4.To pay compensation by way of interest @12%

p.a. on the deposited amount, due to the

complainant w.e.f. 01.06.2016, onwards (per

month) by the 10

th

of the following month,

failing which, the same shall also carry penal

interest @ 15% p.a., instead of 12% p.a., from

the date of default, till the delivery of

possession.

5.To pay compensation by way of interest @12%

p.a. on the deposited amount, due to the

complainant w.e.f. 01.06.2016, onwards (per

month) by the 10

th

of the following month,

failing which, the same shall also carry penal

interest @ 15% p.a., instead of 12% p.a., from

the date of default, till the delivery of

possession.

6.To pay cost of litigation, to the tune of Rs.

50,000/-, to the complainant, within two

months from the date of receipt of a certified

copy of this order, failing which, the same shall

also carry interest @12% p.a., from the date of

filing the complaint till realization.”

3. The Appellant preferred appeal against such order passed by

SCDRC before the NCDRC. The NCDRC issued inter-alia the following

directions:

“(C) Compensation:

The compensation for loss and injury, for mental

agony and physical harassment, hardship and

difficulty, uncertainty and helplessness, can be

neither meagre nor exorbitant, but has to be just

and equitable, commensurate with the loss and

injury (note: it could be less than or more than

what the complainant asked for or what the State

Commission determined, at the considered wisdom

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of the adjudicating authority/court in the facts and

specificities of the case).

And it is always desirable and preferable, to the

extent feasible and appropriate in the facts and

specificities of a case, that some objective logical

criteria be identified and adopted to determine the

compensation. The compensation cannot be

arbitrary or whimsical, some reasonable and

acceptable rational has to be evident subjectivity

has to be minimized.

We note that the State Commission has given

compensation in two parts, one, by way of interest

on the deposited amount from the ‘promised’/

assured date after taking in view the extension

sought vide letter dated 05.06.2013 i.e. 12 months

after the 24 months’ conveyed and understood

time period for completing construction and

handling over possession, and, two, a lumpsum

amount.

If compensation comprises of two parts, (i) by way

of interest on the deposited amount from the

assured date (milestone date) of completing

construction and handling over possession to the

actual date of handling over possession, and, (ii)

lumpsum amount, we find nothing wrong in it.

We do not agree with the builder co.’s contentions

that interest on the deposited amount should not

be provided since it is not a case of refund but a

case of delay in possession. The interest on the

deposited amount has to be viewed in the light of

the purpose for which it is intended. It is but a way

of computing compensation for delay in

possession that is commensurate with the amount

deposited by the complainant, and here it has

been computed after adopting a milestone date as

per the builder co.’s own (unfair and deceptive)

letter of 05.06.2013. There can be and is no

question of not agreeing to an endorsing the

award of interest from the said milestone date.

Here we may however add that the rate of interest

also cannot be arbitrary or whimsical, some

reasonable and acceptable rationale has to be

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evident, subjectivity has to be minimized, a logical

correlation has to be established. Albeit detailed

arithmetic or algebra is not required. Logical (to

the extent feasible) objective parameters should

be adopted. Rounding off simplification etc. to

make the computation doable could be adopted.

We feel it appropriate that, considering that the

subject units in question are dwelling units, in a

residential housing project, the rate of interest for

house building loan for the corresponding period in

a scheduled nationalized bank (take, State Bank of

India) would be appropriate and logical, and , if

‘floating’/ varying/different rates of interest were/

are prescribed, the higher rate of interest should

be taken for this instant computation.

We also feet it appropriate and logical that the

lumpsum amount awarded should be

commensurate with the period for which there has

been delay in possession beyond the milestone

date, and be objectively and logically computed

so.

In our considered view, a sum of Rs. 1 lakh per

year from the assured date of handing over

possession to the actual date of possession (pro-

rata to the nearest whole month, with part month

to be taken as one month) would be objective,

logical, just and equitable in the facts and

specificities of the case.

(D)Cost of litigation:

In respect of cost of litigation, too, just and

equitable cost is necessary (this, by its very nature

needs no elaboration).

In our considered view, cost of litigation of Rs. 1

lakh is just and appropriate in the facts and

specificities of the case.”

4. The Complainant book a built up flat for purchase in pursuance

of a brochure on 30.03.2010 in a project known as “ DLF Valley” in

Sector 3, Kalka-Pinjore Urban Complex, Panchkula, Haryana . The

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Buyer’s Agreement was executed on 11.02.2011. The possession of

the unit was contemplated to be delivered within 24 months from the

date of execution of the agreement i.e. up to 10.2.2013 failing which

the Appellant was liable to pay Rs. 10/- per sq. ft. per month for the

period of delay. The complaints were filed before the SCDRC alleging

delay in delivery of possession of the escalation free flats and

compensation on account of delay in handing over possession

including mental agony and litigation expenses etc.

5. In the return, the stand of the Appellant was, construction could

not be completed on account of stay granted on construction activities

by this Court which operated from 19.04.2012 to 12.12.2012.

Thereafter, the Appellant sought consent from the Complainant to

extend the period of handing over possession by one year vide letter

dated 05.06.2013. In the alternative, option was given to get back the

money deposited by the Complainant along with simple interest at the

rate of 9 per cent per annum. It is also pointed out that on the day

reply was filed, construction of 258 independent floors was complete

and another 1517 built-up units were near completion. Even

occupation certificate has been received for the units for which

construction was complete.

6. The similar dispute in respect of same project came up for

decision before this Court in DLF Homes Panchkula Pvt. Ltd. and

Another Etc. v. Himanshu Arora and Another, Etc.

3

. The said set

of appeals were decided on consent granting interest at the rate of 9

3 C.A No. 11097/2018 with C.A. Nos. 11098-11138 of 2018 decided on 19.11.2018

6

per cent per annum.

7. Subsequently, another set of appeals, Civil Appeal Nos. 2285-

2330 of 2019 titled DLF Homes Panchkula (P.) Ltd. vs. Sushila

Devi and Another came up for decision before this Court including

appeals filed by the Appellants as well as by the Complainants. Such

appeals were also decided by consent. The agreed terms are as under:

“(a)In all Refund cases, the award of interest @

9% would be payable in respect of deposits from

the day they were made till the date of refund.

(b)In cases where, upon transfer, a subsequent

purchaser had stepped into the shoes of the

original allottee and had prayed for Refund, the

reckoning date for computing the interest be from

the date of his transfer in respect of all the

amounts that were deposited by the original

allottee and if any subsequent deposits were made

by the transferee, from the dates of such deposits;

(c)In cases where Possession was sought, the

period available to the Developer under the

agreement being three years (that is to say

original period of two years which was extendable,

at the option of the Developer, by further period of

one year) ought not to be computed while

calculating compensation in the form of interest.

Therefore, the period to be reckoned shall be after

expiry of three years from the date of agreement

and in respect of such period the compensation

shall be at the same rate of 9%.

(d)In Possession cases, if there was any transfer

and the transferee had stepped into the shoes of

the original allottee, the compensation shall be

paid from the date of expiry of three years from

the agreement as aforesaid or from the date of

transfer, whichever is later.”

8. Learned Senior Counsel for the Appellant submitted that in terms

of the consent orders passed by this Court, the consumer complaints

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be decided in terms of the Court orders passed in two sets of appeals

that is the cases of delay in handing over possession as well the cases,

where the complainants have sought refund of the amount deposited.

However, it is contended that certain allottees are not taking

possession so as to earn interest at the rate of 9 per cent per annum

which is more than a contractual compensation of Rs.10/- per sq. ft.

per month for the delayed possession as well as the loss of rent per

month pleaded by the allottees such as D.S. Dhanda (F.A. No.

853/2016), Sandeep Malik (F.A. No. 1312/2016), Bijender Singh

Sangwan (F.A. No. 1314/2016), Kanwal Mohan (F.A. No. 1356/2016).

9. It is contended that since the rental value is not more than the

compensation awarded by this Court in the consent order referred to

above, therefore, some of the allottees are intentionally not taking

possession so as to continue to earn interest under the guise that it is

the Appellant who is not handing over the possession. It is contended

that in terms of the chart produced in Sushila Devi's case (supra), 9

per cent interest is payable till two months after offer of possession

though such clause does not find specifically mentioned in the order

passed by this Court.

10.It is argued that the Appellant will hand over possession only

after obtaining occupancy certificate from the Town and Country

Planning Department of the State of Haryana and after ensuring that

the maintenance works are taken care of by Jones Lang LaSalle - the

international real estate maintenance agency.

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11.On the other hand, learned counsel for the allottees argued that

the possession is being offered of incomplete building and that

allottees are entitled to compensation on account of the mental agony

and litigation expenses awarded by SCDRC and as modified by NCDRC.

12.We have heard learned counsel for the parties and find that the

appellant offered for built up 1775 flats in its project the DLF Valley in

Sector 3, Kalka-Pinjore Urban Complex, Panchkula, Haryana. Some of

the disputes settled in earlier two rounds of appeals, whereas, many

complaints are still pending before different fora.

13.There is no surviving dispute in respect of extended period of

handing over possession available to the Appellant i.e. 36 months. By

virtue of such extended period, the possession was required to be

handed over on or about 11.02.2014. The present set of appeals

relates to the Complainants claiming possession of the flats allotted to

them in the DLF Valley. It is categorical stand of the Appellant that the

flats have been completed and occupation certificate obtained from

the Office of Director, Town and Country Planning Department of State

of Haryana.

14. The learned NCDRC rightly held that compensation for loss, mental

agony, litigation expenses and hardship, uncertainty and helplessness

can neither be meagre nor exorbitant but has to be just and

commensurate with the loss and injury. After holding so, the learned

NCDRC found that the Complainants are not entitled to stipulated

amount on account of delay in handing over possession but damages

9

on the amount deposited apart from interest on the amount so

deposited.

15. A perusal of the order passed by NCDRC shows that it approved

the directions of the SCDRC granting interest on the amount deposited

from the assured date and a lumpsum compensation on the deposited

amount from the assured date of completing construction and handing

over possession to the actual date of handing over possession. The

NCDRC thereafter awarded interest on the amount deposited by the

complainants at the maximum rate of interest on which the House

Building Loans are granted by nationalized Bank such as the State

Bank of India; awarded a sum of Rs. 1,00,000/- per year from the

assured date of handing over possession to the actual date of

compensation and another sum of Rs. 1,00,000/- as cost of litigation.

16.The District Forum under the Consumer Protection Act, 1986

4

is

empowered inter-alia to order the opposite party to pay such amount

as may be awarded as compensation to the consumer for any loss or

injury suffered by the consumer due to the negligence of the opposite

party including to grant punitive damages. But the forums under the

Act cannot award interest and/or compensation by applying rule of

thumb. The order to grant interest at the maximum of rate of interest

charged by nationalised bank for advancing home loan is arbitrary and

no nexus with the default committed. The appellant has agreed to

deliver constructed flats. For delay in handing over possession, the

consumer is entitled to the consequences agreed at the time of

4 1986 Act

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executing buyer’s agreement. There cannot be multiple heads to

grant of damages and interest when the parties have agreed for

payment of damages at the rate of Rs.10/- per sq. ft. per month. Once

the parties agreed for a particular consequence of delay in handing

over of possession then, there has to be exceptional and strong

reasons for the SCDRC/NCDRC to award compensation at more than

the agreed rate.

17.Though the 1986 Act empowers the authorities to award

compensation for any loss or injury including building damages but the

order of NCDRC or that of SCDRC of awarding compensation is without

any foundation being laid down by the complainant on judicially

recognised principles and is by rule of thumb. Therefore, we find that

grant of compensation under various heads granted by the NCDRC

cannot be sustained.

18.This Court in a judgment reported as Secretary, Irrigation

Department, Government of Orissa & Others vs. G.C. Roy

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examined the question as to whether an arbitrator has the power to

award interest pendente lite. It was held that a person deprived of use

of money to which he is legitimately entitled has a right to be

compensated for the deprivation which may be called interest,

compensation or damages. Thus, keeping in view the said principle

laid down in the aforesaid judgment, the amount of the interest is the

compensation to the beneficiary deprived of the use of the

investment made by the complainant. Therefore, such interest will

5 (1992) 1 SCC 508

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take into its ambit, the consequences of delay in not handing over his

possession. In fact, we find that the learned SCDRC as well as NCDRC

has awarded compensation under different heads on account of

singular default of not handing over possession. Such award under

various heads in respect of the same default is not sustainable.

19. Thus, we find that the complainant is entitled to interest from the

Appellant for not handing over possession as projected as is offered by

it but it is not a case to award special punitive damages as the one of

the causes for late delivery of possession was beyond the control of

the Appellant. Therefore, in view of the settlement proposal submitted

by the Appellant in earlier two set of appeals in respect of same

project, and to settle any further controversy, the Appellant is directed

as follows:

i) To send a copy of the occupation certificate to the

Complainants along with offer of possession. The Appellant shall

also direct the Jones Lang LaSalle - the real estate maintenance

agency, engaged by the Appellant to undertake such

maintenance works as is necessary on account of damage due to

non-occupation of the flats after construction etc.

ii) It shall be open to the Complainants to seek the assistance of

the maintenance agency to attend to the maintenance work

which may arise on account of non-occupation or on account of

natural vagaries.

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iii) Such maintenance work shall be completed by the Appellant

within two months of the offer of possession but the payment of

interest at the rate of 9 per cent per annum will be for a period of

two months from the date of offer of possession in all situations.

v) Since the Complainants have been forced to invoke jurisdiction

of the consumer forums, they shall be entitled to consolidated

amount of Rs. 50,000/- in each complaint on all accounts such as

mental agony and litigation expenses etc. The complainant shall

not be entitled to any other amount over and above the amount

mentioned above.

vi) In case, the original allottee has transferred the flat, the

transferee shall be entitled to interest at the rate of 9 per cent

per annum from the date of expiry of three years from the

agreement or from the date of transfer, whichever is later.

CIVIL APPEAL NOS.4942-4945 OF 2019

(@SLP (C) Nos. 4363-4366 of 2019)

20.Leave granted.

21.The Complainant in these cases have sought refund of the

amount deposited by them with the Appellant. The learned SCDRC

passed an order on 04.08.2017 directing the Appellant as under:-

“i. To refund the amounts of Rs. 49,25,461/-

alongwith simple interest @ 15% per annum, to

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the complainant, from the respective dates of

deposits, till realization, within 45 days, from the

date of receipt of a certified copy of this order,

failing which, the Opposite Parties shall pay the

aforesaid amounts alongwith simple interest @

18% per annum, instead of 15% per annum, from

the date of default till actual payments;

ii. To pay an amount of Rs. 35,000/- as litigation

costs, to the complainant, within a period of 45

days from the date of receipt of a certified copy of

the order, failing which, the Opposite Parties shall

pay the aforesaid amount alongwith simple

interest @ 15% per annum from the date of filing

the complaint till actual payment.”

22.The appeal filed by the Appellant before NCDRC was dismissed

for non-compliance of an order in an application of condonation of

delay. Still aggrieved, the Appellants are before this Court.

23.We find that the grant of interest at the rate of 15% by SCDRC is

highly excessive. Since in other two set of appeals decided earlier, this

Court has awarded interest at the rate of 9% per annum on the

amount of refund, therefore, the order of SCDRC stand modified so as

to pay interest at the rate of 9% per annum from the date of deposit till

the date of refund.

24.However, in case any transfer of the flat, such interest will be

payable from the date of expiry of three years from the date of

agreement or from the date of transfer whichever is later.

25.The Costs of Rs. 35,000/- imposed by the SCDRC is maintained.

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26.The amount of refund be paid to the Complainants within two

months along with the costs.

……………………...……………………………..J.

(Dr. Dhananjaya Y. Chandrachud)

…………………..………………..……………….J.

(Hemant Gupta)

New Delhi

May 10, 2019

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