Haryana Urban Development Authority                       ... Petitioner
             Vs.
Darsh Kumar                                                            ... Respondent 
 
 

Haryana Urban Development Authority                          ..     Petitioner
             Vs.
Saroj Bala                                                                    ..    Respondent
 
 

Ghaziabad Development Authority                                 ..     Petitioner
             Vs.
Pawan Kumar Verma                                                   ..     Respondent
 
 

Ghaziabad Development Authority                                 ..     Petitioner
             Vs.
Balbir Singh                                                                  ..    Respondent

  Himachal Pradesh Nagar Vikas Pradhikaran
  Through its Chief Administrator                                     ..     Petitioner
             Vs.
  Ex. Captain S.P. Moudgil                                             ..     Respondent
 
 

BEFORE:
            HON’BLE MR. JUSTICE D.P. WADHWA, PRESIDENT
            HON’BLE MR. JUSTICE  C.L. CHAUDHRY, MEMBER
            HON’BLE MR. JUSTICE J.K. MEHRA, MEMBER.
            MRS. RAJYALAKSHMI RAO, MEMBER. 
            MR. B.K. TAIMNI, MEMBER

PER JUSTICE D.P. WADHWA, PRESIDENT.

                                    The question which was before the State Commission and now before us for decision  is:

“If HUDA (Haryana Urban Development  Authority, GDA (Ghaziabad Development Authority) or any other  Urban Development Authority  is required to pay interest as a result   of non or delayed  allotment of plot (s) or flat(s) or house(s)  on the amounts deposited by the allottee at the time of original allotment of the plot/flat/house, then at what rate and upto what period interest would be payable on account of undue delay in the allotment and delivery of possession of the plot/flat/house?

                        To consider this question, this Commission  heard the parties in five cases:

(i)                     In the case of  Darsh Kumar, respondent- complainant (Revision  Petition No.1197/98), was  allotted  on 21.2.1990  by HUDA residential  plot bearing No.192  valuing  Rs.1,99,400/- in Police Lines Area, Hissar in the  State of Haryana.  Respondent immediately paid a sum of Rs.19,940/- being 10% of the cost of the  plot and remaining 15%  of the amount was paid by him on 22.3.1990.   Thereafter Respondent deposited  the instalments as required under the letter of allotment.   Under the terms thereof, he was to be given possession within 30 days from the date of  payment  by him  of 25% of the amount.   No  such possession was given to him  though he had paid   even the full price of the plot.  Complaining deficiency in service he, therefore, sought interest @ 18% per annum on the amount so paid by him.   It was contended by HUDA that possession of the plot could be given only after the area  had been developed.   25% of the amount was deposited by the respondent by 22.3. 1990.   He was to be given possession within 30 days  from  that  date.  District  Forum  on  a  complaint  filed   by   respondent  held  that 
one  year period   was reasonable after the date of deposit of 25%  of amount  for HUDA to deliver possession.   It, therefore, directed  that respondent be paid interest @  18% per annum on the entire amount deposited by him w.e.f. 22.3.1991 till  the date of offer  of possession of the plot on 26.9.94 to the allottee.    Order of the District Forum was challanged  by HUDA  before the Haryana State Commission which upheld  the order of the District  Forum.

(ii)                    In the case of Saroj Bala (Revision Petition No.856/97), the plot measuring  420 sq. meters in Sector 21  at Panchkula was allotted  on  21.7.1987 at the price of Rs.1,30,515/- .   In 1992  the price of the plot was enhanced to Rs.1,60,004.40.   Saroj Bala paid  each and every instalment including the enhanced price charged from her by 28.6.1993.     She was given possession of the plot only on 27.11.1996.    It was contended by HUDA that possession  could not be handed over to Saroj Bala as there was encroachment  on  the plot  by jhuggi dwellers.   Complaining deficiency in service, Saroj Bala  claimed  for escalated price in the construction amounting to Rs.2,13,000/-,  interest  @ 18% per annum on the amount of Rs.1,60,000/-  amounting to Rs.43,200/-, loss of rent @ 1,000/- per month amounting to Rs.20,000/- and Rs.1,50,000/-  on account of mental harassment, all totalling Rs.4,26,200/-.     District  Forum allowed the complaint and directed payment    of interest @  18% per annum on the amount deposited w.e.f. 1.11.1992 till the date of  delivery of possession of the plot to Saroj Bala, Rs.2,00,000/-  on account of escalation  in the cost of construction of house and Rs.50,000/- towards mental torture and physical harassment caused to her.   Claim of Rs.20,000/- on account of rent was, however, declined on the ground that interest had been allowed on the amount paid by the complainant.   On appeal filed by HUDA, State Commission observed that it could not be doubted that  cost of  construction  had arisen considerably during the last 10 years,  but that the interest @ 18% per annum on the amount paid by the complainant was sufficient compensation for the same.   State  Commission therefore,  while allowing the interest @ 18% per annum directed  that the amount of Rs.2,00,000/-  awarded by District forum on account of escalation be deleted.   State Commission reduced the award of compensation of Rs.50,000/- to Rs. 25,000/-.

(iii)                   In the case of Ghaziabad Development Authority  vs. Balbir Singh - Revision Petition No.703/2001, respondent/complainant was  on 10.2.1989 allotted a plot measuring 200 sq. mt. under  Govindpuram Scheme.  Respondent/complainant deposited  full amount  from time to time as demanded by  petitioner - Ghaziabad Development Authority (for short ‘GDA’).  Petitioner-GDA  informed the  respondent  on 4.1.94  that  he had been allotted a plot  bearing No.D-594.  This was followed by another letter dated 4.2.95 informing the respondent that due to  some reason possession of the allotted plot could not  be given and he was allotted plot no.C-148  instead which the respondent/complainant did not like.  After some correspondence between the parties respondent/complainant  was allotted plot No.D-494, but  an amount of Rs.5000/-  was demanded by way of  ‘Cheque Fee’  which was also deposited.  Possession of the plot was given on 14.8.96 only after respondent/complainant  moved the District Forum complaining  deficiency  in service  in not handing over the plot .    District Forum  awarded  interest @ 18%  for the period 1.4.94 to 14.8.96, directed   refund of Rs.5000/- charged as ‘cheque fee’  and  thus allowed the complaint with cost of Rs.2000/-.   In appeal, the Uttar Pradesh State Commission  dismissed the appeal and  confirmed the order of District Forum.  Against this, revision petition has been filed on which notice was issued  limited to the point of  rate of interest awarded by both the lower fora.

(iv)                   In  GDA vs. Pawan Kumar Verma (Revision Petition No. 1303/1999)   respondent/complainant Pawan Verma applied for a plot in Govindpuram Scheme and  got a reservation letter on 10.2.1990 and was  promised possession in the year 1991.  Respondent/complainant  deposited  full cost of the plot by 7.1.92  but then  not finding himself  anywhere   near getting the possession, moved the District Forum, where  during the pendency of the proceedings before the District  Forum,  respondent/complainant  got the possession of the plot only on 21.4.1997.    District Forum directed payment of interest @ 15% from 7.1.1993  till the date of  giving possession, on the amount deposited by the respondent/complainant  with the petitioner-GDA and cost of Rs.1000/-.   Against this  an appeal was filed by the petitioner-GDA  which was dismissed.     It is against this order that revision petition has been filed before this Commission. 

(v)                    In  the  Revision Petition  filed by the Himachal  Pradesh Nagar Vikas Pradhikaran (HPUDA) (RP 1274/98) against the order passed  in appeal by Himachal Pradesh  State  Commission there is also  challenge to award of interest @ 18% per annum.     In this  case are that the respondent-complainant had booked for a Type-A house under a Self Financing Scheme floated by Shimla Development Authority,  a predecessor of H.P.  Urban Development Authority, in February, 1986.  Likely date of completion of the houses was end  December, 1988.  Cost  of the  house  was fixed at Rs.1,44,000/-   which the respondent/complainant paid by 9th December, 1988 in instalments, some of them  even along with interest  @ 18%  per annum on account of delay in payment.    It would appear that even after the expiry of three years  complainant was not given possession of the house.   He approached  the Shimla Development Authority predecessor of  HPUDA and was informed  on  14.7.1993  of price  escalation to Rs.2,56,304/- .   It was further informed   on 9.9.93  of the escalation in the price of the house to Rs.2,87,180/-.  Complaining deficiency of service, complainant approached the District Forum.  He prayed that he may be given possession of the house and that HPUDA be directed  to refund Rs.1,29,000/- which was the interest charged by it on delayed instalment @ 18% per annum.  Complainant wanted refund of this  amount with interest at the same rate of 18% per annum.   Complainant said that he was ready to pay Rs.30,876/-  being the cost of enhanced compensation of land which was paid by HPUDA.    His prayer was that this amount  might be adjusted from the amount to be refunded to him.  District Forum did not go  into the pricing  of the cost of the house  but directed payment of interest @ 18% per annum on the amount deposited  by the complainant from the dates of respective deposits upto 14.7.93 when letter of possession was issued to the complainant.  HPUDA filed appeal against the order of the District Forum to the State Commission  which was partially accepted.   State Commission reduced the period  for which interest was payable but maintained  the award of interest @ 18% per annum.  Aggrieved, HPUDA has filed this petition.

                        Appearing  on behalf of HUDA, learned counsel  Mr. Bana and others brought  to our notice three orders of the  Supreme Court and one order of this Commission in support of the fact that rate of interest of 18%  granted by the State Commission could not  be sustained before us.   He drew  our attention to the case of   HUDA vs. M.S. Lamba (SLP (Civil) No. 14871 of 1994 ) decided by the  Supreme Court on 7.11.96 wherein rate of interest granted @ 18% was reduced to 12% on the amount deposited by  Lamba -the respondent.   He also  referred to another  order of the  Supreme Court in  the case of  HUDA  &  Anr.  vs.  R.K. Goel (SLP (Civil) No.3324/97) decided on 24.10.97  wherein the rate of interest was reduced  from 18% to 10%.   Mr.  Bana then  referred to an order of this Commission in HUDA Vs. Krishan Lal Kalra  decided on 3.11.98  where  the interest in similar cases was reduced from 15% to 12% and   finally  reference was made to  the order of Supreme Court passed in GDA  vs. Union of India (2000) 6 SCC 113 wherein rate of interest payable in such cases was fixed at 12%.    It was submitted  that at times delay in giving possession  was beyond  the control of HUDA and grant of  interest at a higher  rate will be detrimental to the interest of  a   public body like  HUDA which is  engaged in developing urban areas at no profit-no-loss basis.  It was thus submitted that the rate of interest  needed  to be kept @ 10%  as per  policy of HUDA.

                         In  GDA  vs.  Balbir Singh (Revision Petition No.703/2001),  Mr. Kulshreshta  appearing for GDA  submitted  that GDA was  engaged in construction and development activities in  Ghaziabad (in the State of Uttar Pradesh)   and itself was   borrowing @ 16%  per annum from various financial institutions for the purpose.  According to him GDA works at ‘no profit-no loss basis’.   His argument was that  for the purpose of finding out  the  starting point  for any scheme  in the   Brochure it  should be read as a whole.  We are concerned here with the Brochure relating to Govindpuram Scheme.    Mr. Kulshreshtha said that the   reasoning of the State Commission to award   interest @ 18%  just because GDA’s penal rate of interest is 18% was not correct and  distinguishing the instant case  from G.DA vs. Union of India (2000) 6 SCC 113  or  Sovintorg (India) Ltd. Vs. State Bank of India, New Delhi - (1999) 6 SCC 406  was not  correct.    He said the case of GDA Vs. Union of India (2000) SCC 113 was a complete answer  as  regards the contract between the  GDA and allottees and equity demands that rate of interest  to be  given to allottees be kept @ 12%.   He also  cited the case of   Smt. Kausnuma Begum and Others Vs. National Insurance Company 2000 (1) SCALE page 1 wherein  Supreme Court found grant of  simple interest @ 12%  as reasonable.  Then submission of Mr. Kulshreshtha was that as a result of  stay granted by Allahabad High Court   on  new construction  in Govindpuram Scheme  for the period  24.4.91 to 16.12.93 no interest should be payable for this period as no  construction activity could be  undertaken in the light of the stay granted by the High court.  He said delay occurring on  this was for reasons beyond  the controL of GDA.

                        In  GDA Vs. Pawan Kumar Verma (RP No.1303/1999), Mr. R.U. Upadhyay, also counsel for  the GDA,   while  supporting all the points advanced by Mr. Kulshreshtha,  further added that the   Supreme Court in Prashant Kumar Shau Vs. GDA - JT 2000 (4) SC 607 had held  that  where an allottee defaulted  in payment of instalments, GDA  could not  be held  responsible for  any  deficiency.   He also argued that where allottee was  requested by GDA  to take possession and  the  allottee with the sole motive of  earning interest was  evading taking possession, no interest should be granted  in such a case.  He then said  that where allottee  surrenders a plot, he  should not be given any interest on the refunded amount after deduction as per provision  in Brochure (Govindpuram Scheme) .   We, however, need not consider  these submissions  as there are no such findings  either by the District Forum or State Commission in favour of GDA.   It is  then the  case  of Mr. Upadhyay that State Commission’s  rationale  of imposing 18% rate of interest  on the basis  that  GDA  also charges 18% rate of interest  was not sustainable  on facts.  In Hire Purchase Scheme rate of interest levied  was 15% and it was  only if the instalments  were  delayed  that  the allottee was charged  addition  3%  for  that instalment amount  during  the period of delay.   He argued that the  Supreme Court in  most recent judgement   in the case of Smt. Kaushnuma Begum Vs. National Insurance Co.  reported in 2001 (1) SCALE page 1 held that  instead  interest @  12% , courts shall award interest @ 9%.   It was submitted  that for  GDA it was not a commercial transaction and as per Section 34  of  Code of Civil Procedure, maximum interest payable by GDA  should  be 6% per annum.    He reiterated  that lead case was GDA  Vs. Union of India where rate of interest awarded was 12%  and was considered to be  equitable and reasonable and  if rate of  interest of 18%  awarded by the State Commission is upheld, the  same shall adversely affect public  interest in general.

                        In  H.P. Nagar Vikas  Pradhikaran Vs. Ex. Captain S.P. Moudgil (Revision Petition  No.1274/98)  it was submitted   by learned counsel for the petitioner  Mr. H.S. Puri and others,  that it was  true  that in spite of clear   mention of delivery of possession by December, 1988, possession of the house could be given only in 1993 as the project could only be completed by December, 1992 on account of delayed receipt of instalments, litigation by the land owners land acquisition proceedings, labour disputes, disputes  with the contractors and unexpected weather  conditions.   It  was a  Self-Financing Scheme and if there was delay in delivery of possession, contribution of the complainant(s) was not little.  Had they been paying the instalments in time,  Scheme could  have been completed much earlier.   Question of payment of interest  in the case does not arise as no such clause  exists in the Brochure of the Scheme, so the argument proceeds.   Escalation of cost was said to be   justified.   Finally, it was argued that if any interest has to be awarded, then it should be limited to 12%  as laid down by the  Supreme Court in GDA vs. Union of India (2000) 6 SCC 113.

                        On behalf of the respondens/complainants it was  submitted  by  learned counsel  Mr.  Garg and   Mr. Beqrar and others that    there were  numerous cases in which the  Supreme Court had upheld the grant of interest @ 18% .  They referred to cases    of HUDA Vs. Rajnish Chander Sharda, ( Civil Appeal no.5970 of 1995)  wherein award of interest @ 18%  by this  Commission against HUDA was upheld   and GDA Vs.  Dhanesh Chand Goel, (SLP  (Civil) No.11315/2000)   wherein  the Supreme Court  while confirming grant of interest @ 18% by MRTP  Commission  against GDA  observed that on the given facts  award of interest @ 18%  was  reasonable one.   Their main contention was that   the Urban Development Authorities like HUDA,  GDA and others keep money with them for a period which is much after the expiry of  promised period of handing over of the possession.  Parties have borrowed money at much higher rates in the expectation that they will have a shelter over their head but at times possession in some cases  comes too late, that by that time some allottees die  and some  even superannuate who then  start living in a hired accommodation causing them lot  of mental and physical harassment and  agony.  Cost of construction also keeps  going upwards.   Urban authorities keep raising the prices upwards  thus doubly jeopardizing the  interest of the  allottees. They not only have to pay higher price in the case of plot but also  spend more to complete  the house.  If GDA can  charge interest @ 18% for delayed payment, it should also  be  directed to pay  interest @ 18% interest for  money lying  with them.  It was submitted  that the order  passed in Rajnish Chander Sharda case  should be made applicable  mutis mutandis  in all  cases of delayed delivery  of possession either of plot or flat/house i.e. not only granting  interest @  18%   but also  awarding compensation  to  cover increased  cost of house building in appropriate case and that   heavy costs should be awarded to the respondents/complainants in order to discourage  HUDA/GDA  and others  from dragging the consumers/allottees to protracted litigation. 

                        On behalf of the respondent(s)  in Himachal Pradesh Nagar Vikas Pradhikaran Vs. Captain S.P. Moudgil (RP 1274/98)  it was  submitted  that there was inordinate  delay in handing over the possession in this case.  Against promised delivery of possession by December, 1988, possession was given in July 1993.   In spite of instalments paid, some of   them with penal interst @ 18%, it did not  behove of  H.P. Nagar Vikas Pradhikaran to  sit over  his  money.   Internal disputes of the Authority  are its     internal problem and of no  concern of the allottee.  It is presumed that  with  past experience  of the Authority all these points would have been  factored into, while  determining  the  date of  handing over the possession.   The argument of the Pradhikaran   that since there was no clause of payment of interest to be paid by it in the Brochure, is not  maintainable in view  the decision of the Supreme Court in  the case of GDA  vs.  Union of India wherein it was held that even  when  there is no mention of such a clause,  interest  need to be paid by the Public Authority such as GDA (in the instance case HPUDA).  Supreme Court and National Commission have granted  18% rate of interest in several cases.   Thus in order to cover the cost escalation complainant need to be paid interest at a rate which neutralises cost escalation.   In the instant case, cost of the houses were  almost  doubled  and it is admitted that this fact   cannot be gone into,  but the law of the land permits the allottee to be compensated by way of interest at a level which  compensates him and helps in  meeting the ever escalating costs.  12% rate of interest granted by Supreme Court in GDA vs. Union of India was not final  in that, it left this to be determined on the facts  of circumstances of each case.  This, it was submitted, was a fit case where both the District Forum and the State Commission rightly awarded  an  amount  equivalent to 18% rate of interest on the amount  deposited  by  the complainant,  by way of compensation. 

            Before going into merits of the cases, a peep into the  perspective shall be in order.   First we take the case of HUDA. 

                        Haryana Urban Development Authority (for short ‘HUDA’)  has been constituted under the   Haryana Urban Development Authority Act, 1977.   HUDA has been established  for  undertaking  urban development in the State of Haryana and  other connected matters.   Statement of objects and reasons for enacting the  Act,  makes it amply clear  that HUDA was constituted for  ensuring speedy and  economic development of urban areas in the State of Haryana. 

                        Regulation 3 provides for  mode  of disposal of land or building of the HUDA.   Under Regulation 4, a tentative price/premium   for the disposal of land or building  by  HUDA  shall be such as may be determined by HUDA taking into consideration the cost of land, estimated cost of development, cost of building and other  direct and indirect charges, as may be determined by HUDA from time to time.  Procedure has been prescribed for sale or   lease of land or building by allotment or by auction. 

            Regulation 12 provides that in case   price or any instalment  thereof is not paid by the transferee within 30 days from the date it falls due,  the Estate Officer shall  proceed against such transferee in accordance with the provisions of Section 17 of the Act.   Section 17 provides for resumption and forfeiture for breach of   conditions of transfer.   We quote this Section:

“17. Resumption and forfeiture for breach of conditions of transfer- (1) where  any transferee makes default in the payment of any consideration money, or any instalment on account of the sale of any land or building, or both, under section 15, the Estate Officer may, by notice in writing, call upon the transferee to show  cause within a period of thirty days, why a penalty which shall not exceed ten percent of the amount due from the transferee, be not imposed upon him.

(2)  After considering the cause, if any,  shown by the transferee and after giving him a reasonable opportunity of being heard in the matter, the Estate officer may, for reasons to be recorded in writing, make an order imposing the  penalty and direct that the amount of money due along with the penalty shall be  paid by the transferee within such period as may be specified in the order.

(3)   If the transferee fails to pay the amount due together with the penalty in accordance with the order made under sub-section (2), or commits a breach of any other condition of sale, the Estate officer may, by notice in writing , call upon  the transferee to show cause within a period of thirty days, why an order of  resumption of the land or building, or both, as the case may be,  and  forfeiture of  the whole, or any part of the money, if any, paid in respect thereof which in no case shall exceed ten per cent of the total amount of the consideration money,  interest and other dues payable in respect of the sale of the land or building or both should not be made”.

                        Under  Regulation 13  possession of the land shall be delivered to the transferee  as  soon  as  the development  work  in the  area  where the land is situated are complete.   However, in case of sale/lease  of undeveloped land/building , possession thereof shall be  delivered within 90 days of the date of  allotment.

                        Regulation 14 provides  for surrender of land by the  transferee.  Regulation 16 prohibits the  use of land  or building for  a purpose other than  that for which  it had been allotted to him.   Under Regulation 17  transferee shall complete the building within a period of two years from the date of offer of possession of the land.   This time limit  may be extended by the Estate  Officer, if he is satisfied that failure to complete the building, was due to causes beyond  the control  of the transferee. 

                        We may also note that  under Section 14 of the Act, State  Government may,  at the request  of HUDA,  when any land is required for the purposes of this Act, proceed to acquire it under the provisions of the land Acquisition Act, 1894 (as amended from time to time) and on payment by the HUDA of the  compensation awarded under that Act and  of any other  charges incurred in acquiring the land, the land shall vest  with HUDA. 

                        Section 15 authorises HUDA to dispose of the land.   This Section again we quote:

“15. Disposal of land. - (1) subject to any directions given by the State Government under this Act and the provisions of sub-section (5), the Authority may dispose of -

(a)   any land acquired by it or transferred to it by the State Government  without undertaking or carrying out  any development thereon; or

(b)  any such land after undertaking or carrying out such development as it thinks fit, to such persons, in such manner and subject to such terms and conditions, as it considers expedient for securing development.

(2)  Nothing in this Act shall be construed as enabling the authority to dispose  of land  by way of gift, but subject to this condition, reference in this Act to the  disposal of the land  shall be construed  as reference to the disposal thereof in any manner, whether by way of sale, exchange or lease or by the creation of any  easement right or privilege or otherwise.

(3)  Subject to the provisions hereinbefore, contained, the Authority may sell lease, or otherwise transfer  whether by auction, allotment or otherwise, any land  or building belonging to it on such terms and conditions as it may, by regulations, provide.

                        GDA   also was created under U.P. Urban Planning and Development Act and GDA has  taken up the work of  construction and development of area vested in them in a phased manner borrowing funds from financial institutions.   GDA works  on no profit - no loss basis for the welfare of the public at  large.   Terms  and  Conditions of plots plots/flats/houses are given in the Brochure issued in respect of each Scheme floated by them. 

If we examine the Govindpuram Scheme (Plots/ Houses Scheme: Code 537, 538 and 539) it appears to be a self contained scheme.    Conditions are stringent.   There is no scope  for any negotiation  by the prospective allottee.  He is to sign on the dotted lines.  Scheme therefore, has to be construed  liberally in favour of the allottee.

Under clause 3.30, approximate cost of each plot/house is given in column  5 of table 1.   The cost of the ground floor house   on the corner plot will be 10% extra of the premium of land.   It is mentioned in the note under this clause that cost of the unit will be decided finally basing on the index of State planning Institute.   There is thus  enough safeguard that cost cannot be arbitrarily increased  of the plot or the house.

Plots/houses are being constructed under lump sum   self financing plan and hire purchase plan.  An applicant has to pay registration amount along with the  application.  He  has also to pay registration  fee  along with the application.   Then within   30 days from the date of reservation letter applicant has to pay reservation amount.   Balance cost of the plot/house is payable  in    yearly instalments.  All the payments are mentioned in the table-1 annexed to the scheme.   No interest is payable on instalments under self-financing scheme and 15% interest is payable on instalments under hire purchase scheme.    If the  amount payable is not paid within the prescribed time limit, penal interest @ 18% per annum shall be payable along with the payable amounts.  Grace period of one month is given for payment of reservation amount/instalments after the  due date.    However, if any previous amount of the instalment stands unpaid on the due date, no grace period is admissible  on the current instalment.   In case payment is made after the grace period,  penal interest is payable from the  original due date of payment.    Penal interest will be payable for  a period of maximum three months.

Then  come clause 3.66 which says if the payment is not made within  three months  after its due date along with penal interest, the allotment  shall be treated as cancelled without notice.

Clause 4 of the scheme provides  the  eligibility conditions.   One of such condition is that the applicant must not own any residential house or plot in  full or in part on lease hold or free hold basis in Ghaziabad. Either in his/her own name or in the name of his/her, wife/husband or in the name of his/her minor or dependent children.  Only one house/plot is to be allotted  to the applicant in his/her name or in the  name of any dependent members of the family.

Clause 4.6 provides that  income limits  are applicable in these schemes. As to what income means, it has been   defined.  Clause  6 provides for quota of reservation in various categories.    Last date for making application is 31.10.1988.     Procedure is prescribed as to how draw is to be made and how amount is to be returned to unsuccessful applicants.

Clause 15 says  that the plots/houses are expected to be completed within two years.    Houses cannot be  used for other than residential purposes  by the by the allottee or his tenant.  If  any change of use for commercial or   other purposes  is desired, special permission is to be obtained from the Vice Chairman,  GDA.

                        Clause 11 provides   that if it is found  that the applicant has given false  information  or suppressed any material fact, the reservation will be liable to be cancelled without making any reference to the applicant and he/she  will be debarred from participating in future draws.  Further 25%  of registration amount shall be forfeited.

                        All public Urban Development   Authorities  follow somewhat the same scheme for allotment of plots/flats/houses and as it is seen  from the  Govindpuram Scheme of GDA it is heavily loaded in favour of GDA.

                        Question of award of interest was considered by this  Commission in the case of  Punjab Urban Planning & Development Authority Vs. Dr. Dalbir Kaur  Dhillon (First Appeal No.157 of 1999) decided  on 1.8.2001.   In that case there  was delay of  considerable years in the allotment of  land  to the respondent- complainant.   There was certainly  deficiency in service in depriving the complainant  of  the  land for all these years with the result that the  complainant could not construct her house for her own residence and meanwhile  cost of construction escalated.     Complainant led evidence to show that  there would be  difference in the cost of construction  amounting to Rs.9.00 lakhs if  she had constructed  the house when the land  was originally allotted to her.  No evidence in rebuttal  was led by  Punjab Urban Planning & Development  Authority.     This Commission, therefore, awarded the amount  of difference of cost in construction.   No interest was, however, awarded which was allowed by the State commission @ 18% per annum on the amount of cost  of the plot.   This Commission observed as under:

“When court is giving escalated price for the construction, it does not seem appropriate to give interest on the amounts paid towards purchase price of the plot to bring the value of the plot at the market rate on the date of possession.  It has also to be kept in mind that there has been manifold increase in the price of the land”.

                        This Commission, however, allowed compensation for the expenses incurred by the complainant in seeking possession of the land.  It was pointed out that award of interest at a particular rate should be such as to compensate the allottee  if he(she) is deprived  of the allotted piece of land and is to go elsewhere  in the same or nearby  area to buy a plot of land  of the same measurement.

                        It will thus be seen that this Commission  did not award interest @ 18% per annum merely  on the deposit made but took into account the cost  escalation for  construction of the house  because of delayed possession.

                       We may now consider  some of the decisions  on the question of rate of interest  for the period for which it should be payable as set out in the beginning of this order. 

                       In Lucknow Development Authority Vs. M.K. Gupta  - (1994) 1 SCC 243  [two Judges  Bench decision).  Supreme court examined right and power of the National  Commission   to   award   exemplary    damages    and    accountability    of       statutory authorities.   Supreme court considered various aspect of the Act and then said that after having examined the wide reach of the Act and jurisdiction of the  National Commission to  entertain complaint, the Commission or  Forum   under the Act was entitled to award  not only value of the  goods  or services but also to compensate a consumer for injustice suffered by him.    In the case before it,  Supreme Court approved of the order of the Commission, held that “the action of the appellant amounted to harassment, mental torture and  agony  of  the respondent”, therefore, it directed the appellant to pay a sum of Rs.10,000/-.  In the other case that was before it Supreme Court  approved order of this Commission directing the Bangalore Development  Authority to pay Rs.2,446/- to the consumer  “for the expenses incurred by him in getting the  lease -cum-sale agreement registered as it was  additional expenditure for  alternative site to him.  No misfeasance was found”.   The moment  the Authority came to know of the mistake committed by it, it   took immediate action by allotting alternative site to the respondent, which was  compensation for exact loss suffered by the respondent.   Then the court examined question as to who was to bear the loss  whether the instrumentality of the State or its functionary.    Supreme Court said :

“When the Court directs payment of damages or compensation  against the State the ultimate sufferer  is the common man.   It is the tax payer’s money which is paid for  inaction of those who are entrusted under the Act to discharge their duties in accordance  with law.  It is, therefore, necessary that the Commission when it is satisfied that a complainant is entitled to compensation for harassment or mental agony or oppression, which finding of the  course should be recorded carefully  or material and convincing circumstances and not lightly, then it should further direct the department concerned to pay the amount to the complainant from the public fund immediately but to recover the same from those who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionaries”.

                        In the case of Ghaziabad Development authority Vs. Union of India  &  Anr.  (2000) 3 Comp LJ 402 (SC)  there was challenge to the order passed by the  MRTP Commission where it was concerned  with the delay in allotment of plot of land.  Three questions arose before the Supreme Court:

(i)     Whether compensation can be awarded for ‘mental agony’ suffered by the  claimants?

(ii)   Whether in the absence of any contract or promise held out by the Ghaziabad Development Authority any amount by way of interest can be directed to be paid on the amount found due and payable by the Authority to the claimants.

(iii)   If so,  the rate at which the interest can be ordered to be paid?

                        In distinguishing  the decision  in the case of Lucknow Development Authority Vs. M.K. Gupta  (2 Judges  Bench)  the Court observed as under:

“The  judgement clearly showed the  liability having been fixed   not within the realm of the law of contracts,  but under the principles of administrative law.    We do not find any such case having been pleaded  much less  made out  before the MRTP Commission.  Indeed no such finding  have  been arrived at by the MRTP Commission as was reached by the Supreme court  in this case”.

                        Supreme Court therefore, deleted the  compensation of Rs.50,000/-  for mental agony suffered by the claimant which was awarded by the MRTP Commission.  On interest the Supreme Court said the interest  could be  awarded in appropriate case.   It referred to another case of  Sovintorg (India) Ltd.  Vs.  State Bank of India, New Delhi - (1999) 6 SCC 406  where the rate of interest at 15%  per annum was considered adequate to serve the ends of justice,  the National  Commission having awarded interest @ 12% per annum.   It said that the Bench in that case was  apparently influenced  by the fact that the claimant had suffered  winding up proceedings under the  Companies Act and  the defendant must be made to share part of the  blame.    It further said in the case before it, parties had not rendered any evidence  enabling formation of opinion on the rate of interest which  could be  considered  ideal to  be adopted and that rate of interest  awarded  should neither  be too high nor too low.    Court therefore, in its opinion thought that  awarding  interest @ 12%  per annum would be just and proper and will meet the ends of justice. The Court also observed that broadly the principle  underlying assessment of damages is to put the aggrieved party  monetarily in the same position as far as possible in which it would have been if the contract would have been performed.  No doubt the purpose of an award of damages for breach of contract is , so far as money payment can do this, to place the  consumer in the  position he would have been,  had the contract been performed according to his expectations.   It also referred to decision   of Court of Appeal  stating that the  Court of Appeal  had refused to award  damages for  injured feeling to a wrongful dismissed employee and  confirmed that damages for  anguish and  vexation caused  by breach of contract cannot be   awarded in an ordinary commercial transaction.    We may, however, add in  Barnstein  Vs. Pamson Motors (Golden Greaves ) Ltd.  - (1987) 2 ALL ER 220, it was held that physical inconvenience and distress resulting from the purchase of a car which breaks down  shortly after purchase and the cost of hiring a replacement while the car is being repaired may all be regarded as losses which arise naturally from the retailers breach of the implied conditions of  satisfactory quality. 

                        In the case of  Rajnish Chander Sharda  Vs. Haryana Urban Development Authority - II (1995) 70 (NC), National Commission directed that HUDA should allot and give possession of the plot of  250 Sq. yards  to the complainant in the same sector or  neighbouring   sector which had been reasonably developed and where the complainant could undertake construction without delay.  It said that HUDA shall not be entitled to any  extra price for the allotment  of the plot  which  would be in lieu  of what had been allotted to him earlier   National Commission further said that HUDA should pay compensation  for  escalation in the cost of construction from  1982 to 1994 in accordance with the  construction  done under  “Unified  Building  By Laws National Capital Territory of Delhi”.   In this case  Rajnish Chander Sharda was allotted 250 sq. yards plot on 10.5.79 by HUDA in a particular sector.  When the complainant asked for possession of the plot in 1982  so as to construct a house thereon he was given possession certificate.   He approached the contractor and  architect for the purpose of construction of a house but when he asked HUDA for actual physical possession it was discovered that  a factory existed  on  the  plot.  He   was  told  that  factory  will  be removed by December, 1982.   However, subsequently he was advised to ask for an alternative plot as the plot  allotted to him could not be vacated.   Complainant reported  these facts to the Executive  Officer in  September, 1983, no alternative  allotment was made.   On the other hand, HUDA asked him  in  1986  a sum of Rs.3,455/-  towards  enhancement of the compensation for the acquisition of the said plot whose  possession  could  not be given to him because of the  factory thereon.   After a lapse of 11 years HUDA  on 18.5.90 allotted a plot  in another sector to the complainant.   This was done  unilaterally without the consent of the complainant.   Though  the allotment was made in 1990  possession could be offered to the complainant on 26.4.1993.   But then  again the area was  surrounded by factory.  Complainant asked for an alternative plot in another sector.  Instead of replying to his request,  HUDA issued a possession certificate on 25.8.1993.   When the complainant contacted  architect for getting the house plan sanctioned  it was told by HUDA that the plot belonged to another person and was not available for allotment, building plan therefore, could not be approved.    In sheer exasperation  complainant came before the  National Commission in October, 1993.   He  claimed damages for increase in the  cost of construction from 1982  to November 1993, compensation for mental agony and physical torture , rent for accommodation  for his family members from 1982 @ Rs.1600/- per month, expenditure  on journeys  undertaken and correspondence with HUDA and payment of fees to the architect and  contractor;  after considering  the matter in depth National Commission gave the award as under:

“We direct that HUDA should pay compensation for escalation in the cost of construction from 1982 to 1994  in accordance with construction done under : “UNIFIED BUILDING BY LAWS NATIONAL CAPITAL TERRITORY OF DELHI”.   Though the complainant can construct three and a half storeys   including basement, the maximum ground coverage (viz.60%) and the F.A.R. (Floor Area Ratio viz. 160) has to be limited to as laid down in the Bye Laws, 1992.   The expenditure incurred on provision of services (Electrical, Sanitary, Water supply etc.) over and above the bare cost  of the construction has also to be added in arriving at the cost of construction in 1982 and 1994.   The escalation in the cost of construction of a house should be worked out on the basis of the cost of construction index of the C.P.W.D. in 1984 and 1994.   The   compensation for  escalation should, therefore, be got determined through the good offices of the C.P.W.D.  Rs.11,00,000/- claimed for mental agony, torture due to mismanagement of HUDA etc. at the rate of Rs.1 lakh per year.   This is exorbitant.  We consider it reasonable to allow a compensation  of Rs.2 lakhs.
Rs. 2 lakhs claimed by way of rent from 1982 onwards at the rate of Rs.1,600/-  per month for having to live in a rented accommodation.  Instead we direct that complainant shall be paid interest @ 18% p.a. on the amount deposited from time to time by the complainant from 1979 onwards till a anew plot is allottted and possession given.  Rs.50,000/- claimed as expenditure for chasing the case with HUDA for a period of 14 years.  This is reasonable and is allowed.  Rs.7,800/- claimed as payments made to the Architect and contractors etc.   This appears reasonable and is allowed”.

                        Against this order  HUDA went in appeal before the Supreme Court ( Civil Appeal No.5970 of 1995 - Haryana Urban Development Authority Vs. Rajnish Chander Sharda, decided  on  January 12, 2000  by three Judges  Bench).    The Bench upheld  the order of the National Commission and held as under:

“There is no merit in this appeal.  Considering what has been stated by the appellant in its own written statement  filed before the National Consumer Disputes Redressal Commission, we express our surprise that it should have filed this appeal at all.  Learned counsel for the appellant now desires  to confine the appeal only to the interest that has accumulated because of the stay order that was passed at the appellants’s instance  by this Court.   In the order of the National Commission it is stated that the respondent had claimed compensation for having being compelled to live in rented  accommodation from 1982 till 1994 at the rate of Rs.1600/-  per month.   Instead of making that award, the National Commission directed the appellant to pay interest at the rate of 18% per annum on the amount that had been deposited by the respondent form time to time from 1979 onwards till a new plot could be  allotted to him and possession thereof could be delivered.  Given the facts, we see no justification  in interfering with that direction and, consequent upon the dismissal of the appeal and the  vacation of the stay order, that direction must now be fully complied with.

The appeal is dismissed with costs”.

                        Decision of the two Judges Bench decision in the case of GDA vs.  Union of India - 2000 (6) SCC 113  was referred to in the case of Ghaziabad Development Authority Vs. Dhanesh Chand Goel (Special Leave to Appeal (Civil) No.11315/2000, decided on 12.1.2001 - arising from the order of the MRTP Commission dated  22.2.2000) where a three Judges Bench  of the Supreme Court  held that  award of 18% interest  per annum  could also be given on equitable grounds, where the facts were that GDA  started a scheme  for allotment of houses in Govindpuram Housing Scheme (Code 538).    Shri  Dhanesh Chand Goel applied for an allotment of LIG (double storey) Ashray Ground in that scheme.   He paid Rs.11,010/- towards registration amount on 31.10.1988.   GDA, vide letter dated 29th  March, 1989, conveyed reservation of one LIG double storey at  the  estimated  cost  of Rs.1,10,000/-.   Shri Goel paid the balance amount on various dates i.e. on 25.5.1989 (Rs.11,000/-);  27.10.1989 (Rs.22,000/-); 24.4.1990 (Rs.22,000/); 15.10.1999 (Rs. 22,000/-) and 26.4.1991  (Rs.22,000/-).   Shri Goel was intimated on 16th November, 1993  that he has been allotted House No.F/181.    This was as per the draw held on 20th  October,  1993.    He  was also informed about the increase in the cost of the house from 1,10,000/- to Rs.1,80,000/- vide letter dated 6th March, 1996 of GDA.  Shri Goel did not make the payment and as  such possession of the house was not  given to him.  Shri Goel complained that GDA   was indulging  in the restrictive trade practices in so far as additional demand has been imposed on him by manipulating the conditions of delivery of the house.  On notice being issued, GDA took up the stand that there was some dispute in regard to the aforesaid scheme and the Hon’ble  Allahabad High Court stayed the proceedings in the case of Satya Prakash & Ors.  Orders of the High Court of Allahabad is dated 24th April, 1991.   This case in the High Court of Allahabad was dismissed and special leave  petition in the Supreme Court also met the same fate.   GDA then says that ‘F’ block was then allotted to Shanti Suraksha Bal and as such he could not be given possession of the allotted house.   He was told so on 24.2.1996.  He was asked to give option for allotment in some other scheme and at different place.   Shri Goel did not exercise option nor make the payment as determined.   The allegation of Shri Goel that  GDA  was indulging in the restrictive trade practices was denied.   MRTP Commission strongly commented on the  conduct of the GDA.  It was noted that the stay granted by the Allahabad High Court remained operational till 16.3.1993 and even Special Leave petition  in the supreme Court was dismissed on 12.4.1996.   The whole of the ‘F’ Block in which Goel was allotted house No. F-181  came to be allotted to the Shanti Suraksha Bal.   Not only Goel was deprived of the allotted house but he was also slapped with additional cost for allotment of flat in a different scheme and at a  different place, for which Goel had  never given an option.   MRTP   Commission  held that by not handing over the house to Shri Goel, as he was entitled to, he  has suffered a pecuniary loss not only in terms  of payment made but also in terms of return which he could have been earned on the amount deposited by him with GDA.   MRTP  Commission  directed  the GDA to refund the amount of Rs.1,10,000/- along with interest @ 18% per annum to Mr. Goel from the dates of payments of instalments till the dates of refund  of the total amount in question.   Shri Goel was also awarded a  sum of Rs.10,000/- towards harassment and litigation costs.   As regards the claim of Shri Goel for rent which he paid, MRTP Commission said that costs awarded covers the same.  Petition of Shri Goel was thus allowed.   The Supreme court observed as under:

“The judgement in Ghaziabad Development Authority vs. Union of India  (2000(6) S.C.C. 113)  only opines  that interest  on equitable grounds can be awarded in appropriate cases.   Given the facts recorded in the order under challenge, the rate of eighteen per cent per annum is an award at a reasonable rate.

The special leave petition is dismissed”.

                        From the decisions in the cases of Dhanesh Chand Goel and Rajnish Chander Sharda which had been affirmed by three Judges Bench of the Supreme Court  it can be concluded  that award of interest @ 18% per annum on the amount deposited by an allottee where there is delay in handing over the possession is reasonable and could be awarded on equitable grounds.

                        It is necessary here to meet the point raised by the learned counsel for the petitioners drawing our attention to certain judgements of the  Supreme Court. In Smt. Kaushnuma Begum & Others Vs. National Insurance Co. - 2000 (1) SCALE page 1    rate  of interest has been  awarded at 9%.   It is distinguishable  from the  bunch  cases before us  in the sense that  the  cited case relates to  insurance Company where, what the person has deposited is a premium i.e.only a small portion of the amount  covered as also  the Government’s lien on those funds to be borrowed  at a lower rate of interest where as in the instant cases  money is that of individuals deposited by them from their own savings  or from borrowings.  Had they kept  their money elsewhere, returns by way  of  compound  interest would have been much higher.  What they  ask is interest  on the money kept by the Urban Development Authorities.   To this extent the  two sets are distinguishable.   Be that as it may, our hands get further strengthened by the   most recent judgement of Supreme Court  in which they upheld  grant of interest @ 18% even  in a case involving an Insurance Company as a party i.e. M/s. Jit Ram Shiv Kumar Vs. National Insurance Company 2001 (2) CPR 97 (SC). 

            There are stringent conditions while allotting a plot.   It is not disputed  that an affidavit is to be filed  that the allottee has  no other residential plot or house either in his/her name or  in the  name  of his/her spouse or  minor children.  A person  who  applies for allotment of plot  is stuck.   He has no other place to go and has to wait for years for allotment of the plot so that he   can build  a house for his residence.  Pschye   of an  individual is  always to move from rental accommodation to his  own house.    Government policy also favours house ownership which  has resulted in  coming into being of building societies and also various Authorities  constituted like HUDA.    When an  allottee gives an   application  that he needs a plot  of land to build  a house for  his residence he is not guided by any commercial  considerations.   In most cases his income would be stationary while inflation rises  over the years.  Award of interest  is to enable him to buy a plot elsewhere  if a situation arises where he is to be deprived  of the plot  he applied for.  A consumer is in axiomatic position inasmuch as he has to wait for allotment of plot and he cannot acquire  any other plot of land on account of onerous  conditions that he should not possess any other property at the time of allotment.   Award of interest at a particular rate should be such as to compensate the allottee who is deprived of the land and has to go elsewhere in the same or  nearby area to buy   a plot of land of the same measurement.

In fact the allottee is in a catch-22 situation.   He has deposited  his savings with HUDA to buy a plot.   He has legitimate expectations that a plot of land will be allotted  to him within a reasonable period for him to build his own house for his family.   He cannot  go elsewhere since his money is blocked with HUDA.  It would be too much to expect that an allottee  can  go for  another piece of land elsewhere or  buy house  as he would have no  extra money.   Further by passage of time prices  have rocketed.     We  take  judicial  notice of the escalation  not only in the cost of land but also in cost of construction.   We do not think if the allottee has not specifically  pleaded  rise in cost  of construction   or   cost  of  land,  he  is  not  entitled   to  damages on that  account.     A  consumer who comes  before a  Consumer Forum    is not well versed  in the rule of pleadings  as  given in the  Code of Civil Procedure when  in fact   the Act itself provides    that  provisions of the   Code of Civil Procedure  would not apply to the proceedings before the Consumer  Forum.  A Consumer Forum  is to take a pragmatic view of the whole situation  guided   as it is by  rules of natural justice only  in the  matters.  When the hope and expectations  of an allottee are violated there is a legal injury or loss suffered by him. We may refer to Black’s Law Dictionary to understand what the expressions ‘loss’ and ‘injury’  would mean.   Injury is  ‘any wrong or  damage done to another, either in his person, rights, reputation or property;  the invasion of any legally protected  interest of another’.     ‘Loss’:    is  generic and relative term.    It signifies  the act of losing  or the thing lost;   it  is  not  a  word  of  limited,  hard  and  fast   meaning  and  has  been   held synonymous with or equivalent to, ‘damage’, ‘damages’, ‘deprivation’,  ‘detriment’, ‘injury’ and ‘privation.

Further when clause  (i) of sub section (1) of Section 14 empowers the consumer fora to provide for adequate cost to parties, it is not necessarily     confined   to litigation cost only.

                        HUDA, GDA and other Urban Development Authorities, each one being an Authority constituted under the law and being an extended arm,  of the State government a consumer has full faith  that when he has applied for allotment of plot to build his house and the Authority agreed to do so, he will be able to get the plot fully developed within a reasonable period.   He has no choice  but to wait  for a fully developed plot/flat  be allotted to him for him to start construction.   He is not in a bargaining position.   He has to apply for allotment of plot/flat  on dotted lines as required by HUDA/GDA.   An allottee is not buying plot/flat  for any speculative purpose.   It is for him to build a house for residence  of himself and  his family.  It is a well known fact  that construction cost  increases  over the time.   Why should allottee suffer for inaction on the part of HUDA and others  in not developing a plot within a reasonable time  after having received the amount as per its own requirement?   Allottee has therefore to be compensated.  Why HUDA is using his money and  allottee is also deprived of earning interest on that?   Rate of interest for  delayed allotment of handing over possession of the plot of land is to be reasonable  so as to properly compensate the allottee.  Considering the decisions rendered by the  Supreme court  in the cases referred to above,  we have  already taken  the view  in the case of Punjab Urban Planning & Development Authority vs. Dr. Dalbir Kaur Dhillon (First Appeal No.157 of 1999)  decided  on 1.8.2001 that element of interest  @ 18% per annum  would take  into account not only  loss of interest   but escalation in the cost of  construction.     There was certainly  deficiency in service in depriving the complainant  of  the  land for all these years with the result that the  complainant could not construct her house for her own residence and meanwhile  cost of construction escalated.   We are thus of the opinion  that in the circumstances  of the cases before us  award of  interest @ 18% per annum  is quite reasonable and equitable.

A point was also made by the learned counsel for GDA,   Mr. Kulshreshtha that for grant of interest to the allottees in Govindpuram Scheme,  the period of  24.4.1991 to 16.12.93 be exempted as there was stay granted by the High Court for taking up any new construction.   On the other hand, it was argued by the learned counsel for the respondents that stay  granted by the High Court was restrictive  i.e. stay was to be operative only on  taking up new construction, hence no blank exemption  from payment as prayed by the petitioner be  granted.  We have examined this point at some length in the case of GDA  Vs. Engineers India Ltd.   ( Original Petition No. 34/96)) wherein we had held  that it is true that stay was only on new constructions but the plea taken  by GDA also cannot be brushed aside  in the sense that,  if the  area covered by  the stay order comprised of   areas  for common facilities  like roads, sewerage line, water pipelines,  electric poles etc., area could not be   handed over as it could not be  said to   be developed.   There is some  merit  in the argument.  If we were to send the cases back to the District forum, it  can only start fresh set of litigation which in our view must end and consumer should  finally get some relief.   Hence, we  are inclined to agree with the prayer   made  by  the  learned  counsel for the petitioner that the period be  exempted  en-block  for purposes of calculation of interest to be given to the allottees.

We are of view  that award of interest @ 18% per annum is quite equitable as it will take  into consideration   the escalation of cost of  construction as well.

If the  stories of woes of the common man are to be  scripted   by the one who shouts from the house top  of  his  love for the common man,  then in the  instant case  the only factor  begging question is  the  truth.  Contradiction is perhaps  inherent in the system like  this.   This may be an window of opportunity to   introduce an element  of propriety on the part of Urban Development Authorities  while    dealing  with common man.

                        Subject to the modification   that interest @ 18% per annum  would be allowable  after two years from the date of respective deposits of the amounts, we uphold the orders of the State Commission and dismiss these revision petitions.   We also  like to make it clear that for calculating the period of interest  in the case of allottees in Govindpuram Scheme of GDA, interest shall not be payable for the period from 24.4.91 to 16.12.93 i.e.  the period of stay  granted by Allahabad High Court and as indicated above. There shall be no order as to costs in the circumstances of the cases.