Markandey Katju, J.
This appeal has been filed
against the order passed by the Monopolies and Restrictive Trade
Practice Commission, New Delhi (hereinafter referred to as "the
Commission") dated 13.9.2004 in C.A. No.193 of 2001.
Heard learned counsel for the
parties and perused the record.
The case of the appellant is that
after applying for a flat under the "Indira Puram Housing Scheme" in the
year 1994, a reservation letter dated 30th March, 1994 was received by
him and he was asked to pay seven installments on the specified dates.
The amount as well as the dates on which the installments were to be
paid was mentioned therein. The applicant started paying the
installments as demanded. Subsequently, he opted out for a HIG flat,
which was also allotted to him vide letter dated 17th May, 1994. No
additional demand was asked for in the second letter. The installments
were duly paid as demanded. Thereafter, nothing was heard from the
respondent side for almost five years. After finding that there is no
likelihood of the flat to be made available to him in the near future,
the applicant was left with no alternative but to demand his amount paid
along with interest at the rate of 21% per annum. The amount was
refunded to the applicant in the year 2001 without any interest as asked
for. The applicant thus suffered losses on account of unfair trade
practices adopted by the respondent, hence he sought compensation from
the respondent by filing an application under Section 12B of the
Monopolies and Restrictice Trade Practices Act, 1969 (hereinafter
referred to as "the Act").
In response to the notice issued
under Section 12B of the Act, the respondent filed its reply. The
defence of the respondent was that as the full payment of Rs.6,64,000/-
(estimated cost) as indicated in the reservation letter was not paid,
the possession of the flat was not handed over to him. The refund as
requested, on the other hand was issued to him promptly. There was no
deficiency of service as alleged in the application and as such the
Compensation Application should be dismissed.
It is not disputed that the
installments as mentioned in both the reservation letters, were paid on
the specified dates as indicated therein. It is also not disputed that
though the estimated cost was indicated at Rs.6,64,000/-, the same was
not worked out till the year 1998 when the first camp was held, in
respect of allotment of such flats. The respondent also made no efforts
to issue demand letters in respect of the remaining amount subsequent to
the year 1995 when the last installment was paid. On the other hand, the
applicant was given an assurance that the possession of the flat would
be given to him in the near future. The applicant, therefore, had no
alternative but to ask for refund of the amount as deposited. The
respondent on its side has no explanation for either not demanding the
remaining amount or handing over the possession of the flat. Even the
averments of the applicant that the house is not yet ready has not been
strongly refuted. Thus it is a clear case of deficiency of services on
the part of the respondent. As a result of such unfair trade practices,
the applicant has not only been deprived of return on his investment
made with the respondent authority but also the possession of the flat
promised to him.
Considering the above facts, the
Commission directed the respondent to pay 12% per annum interest on the
installments from the dates of the payment till the date of refund. This
appeal has been filed claiming interest at a higher rate.
Learned counsel for the appellant
Shri Parag P. Tripathi referred to various decisions in which this Court
has granted higher rate of interest e.g. Renusagar Power Co. Ltd. Vs.
General Electric Co. 1994 Supp.(1) SCC 644.
We are of the opinion that there is
no hard and fast rule about how much interest should be granted and it
all depends on the facts and circumstances of the each case. We are of
the opinion that the grant of interest of 12% per annum is appropriate
in the facts of this particular case. However, we are also of the
opinion that since interest was not granted to the appellant along with
the principal amount the respondent should then in addition to the
interest at the rate of 12% per annum also pay to appellant interest at
the same rate on the aforesaid interest from the date of payment of
installments by the appellant to the respondent till the date of refund
on this amount, and the entire amount mentioned above must be paid to
the appellant within two months from the date of this judgment.
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.
With these observations the impugned judgment is modified and the appeal
is disposed of accordingly.
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