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Sri Sastha Constructions Rep. by its Proprietor V. Sreekrishnan v/s S. Murugesan & Another

    F.A.NO.743 of 2010 (Against order in C.C.NO.48/2008 on the file of the DCDRF, Tiruvellore)

    Decided On, 30 January 2012

    At, Tamil Nadu State Consumer Disputes Redressal Commission Chennai

    By, M.A.
    By, M.L.
    By, M.PHIL.
    By, MEMBER

    For the Appellant : K. Ganesan, Advocate. For the Respondents : M/s. Ashok Menon, V. Balaji, Advocates.

Judgment Text

(The 1st Respondent as Complainant filed a complaint before the District Forum against the opposite party, praying for a direction to handover the flat alongwith approved plan, to pay Rs.210000/- towards advance amount, alongwith compensation of Rs.2,75,000/-. Against the said order, this appeal is preferred praying to set aside the order of the District Forum dt.08.07.2010 in CC.No.48/2008.

This petition coming before us for hearing finally on 18.01.2012. Upon hearing the arguments of the counsel for the appellant, perusing the material papers on record, lower court records, as well as the order passed by the District Forum, this commission made the following order:)


1. The 1st opposite party is the appellant.

2. The 1st respondent/ complainant approached the District Forum, alleging negligence and deficiency, against the opposite parties /builders, claiming the following reliefs:

1. To direct the opposite parties to handover the flat alongwith approved plan obtained from the competent authority, failing which

2. The amount paid as part payment of RS.210000

3. To pay the interest for the amount of Rs.210000/- paid at 24% per annum till realization

4. To pay Rs.125000/- for the deficiency in serve of opposite parties for having filed to fulfill their contractual obligations

5. To pay Rs.150000/- for the mental agony and hardship caused by the deficiency in service of the opposite parties

6. To pay the cost of Rs.10000/- for this complaint

3. The 1st opposite party/ appellant, resisted the case, contending that the claim is barred by limitation, that the complainant alone had cancelled the agreement, unable to pay the balance of sale consideration, and as such since they have not committed any deficiency in service, the complainant is not entitled to any relief, denying further averments also in the detailed written version, praying for the dismissal of the case.

4. The District Forum, as per the order dt.8.7.2010, has come to the conclusion that the complaint is not barred by limitation, that the 1st opposite party was unable to complete the construction as agreed, because of his deviation of the plan, not approved by the authorities, that should be construed as deficiency in service. In this view, a direction was issued, against the 1st opposite party alone, to refund a sum of Rs.210000/- with interest thereon at 12% p.a, from the date complainant till payment, in addition to payment of compensation of RS.200000/- towards mental agony.

5. The learned counsel for the appellant argued, that the order of the District Forum, awarding compensation, when ordered interest for the non-payment of the amount, is incorrect, that should be rectified. Though question of limitation was seriously raised, as seen from the written version, as well as, as seen from the grounds of appeal, no argument was advanced, and therefore we refrain from giving any finding, on this point.

6. The learned counsel for the complainant / respondent would contend that for the deficiency committed, the 1st opposite party is liable to pay compensation, in addition interest also, which was properly considered by the District Forum, and therefore compensation ordered cannot be set aside. Therefore, the only point now advanced before us, required for consideration was, whether the complainant is entitled to interest, as well as compensation.

7. As evidenced by Ex.A1, the complainant had agreed to purchase an apartment, which was constructed by the 1st opposite party, in the undivided share purchased by the complainant under Ex.A17. Though several stipulations were made in the agreement, it appears they were not strictly followed, or there was deviation resulting an order from CMDA under Ex.A10, to stop the work, thereafter as if the 1st opposite party completed the work, issued a notice probably suppressing the deviation, and stop order, and when the complainant came to know he cancelled the agreement, by issuing a notice, in which there cannot any violation of the agreement also, since as proved, 1st opposite party has committed default. Admittedly as per the construction agreement, viz. Ex.A4, the complainant has paid a total sum of Rs.210000/-, which is admitted, by the opposite party also. Therefore, when the 1st opposite party has committed deficiency, in not constructing the flat as agreed, without violation as per the approved plan, failed to do so, the complainant was at liberty to cancel and ask for refund of the amount, which had happened in this case, and the amount includes the payment made for undivided share in land also. The opposite party had the benefit of Rs.210000/- unquestionably, and when the agreement was not given effect, by the deficiency committed by the 1st opposite party, we are of the view, that the complainant is entitled to claim interest, which was properly considered by the District Forum, awarding at 12% p.a., from the date of complaint, till payment, in which finding we are unable to disagree. Then comes the controversial question of compensation.

8. The Apex Court of this land, had an occasion to consider the grant of compensation, as well as interest, in Ghaziabad Development Authority Vs. Balbir Singh, reported in 2004 CTJ 605 (Supreme Court) (CP), wherein also, the transfer of plot was involved. While considering the term ‘interest’, as well as ‘compensation’, it is observed, based upon previous decision 'Interest in general terms is the return or compensation for the use or retention by one person of a sum of money belonging to or owed to another. In its narrow sense, interest’ is understood to mean the amount which one has contracted to pay for use of borrowed money…. In whatever category ‘interest’ in a particular case may be put, it is a consideration paid either for the use of money or for forbearance in demanding it, after it has fallen due, and thus it is a charge for the use of forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties or permitted by custom or usage, for use of money, belonging to another, or for the delay in paying money after it has become payable'. It is also observed that ' The general idea is that he is entitled to compensation for the deprivation; the money due to the creditor was not paid, or, in other words, was withheld from him by the debtor after the time when payment should have been made, in breach of his legal rights, and interest was a compensation whether the compensation was liquidated under an agreement or statute'. On the above basis, it is held, the money must be returned with interest, equating compensation, which is the dictum of the National Commission also in Lakshmi Vilas Bank Ltd., Vs. P.R.Krishnan and another in 1995 CPJ 43 NC. Based upon the above two decisions, since District Forum has ordered interest from the date of presenting complai

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nt, till payment, that will take care of the compensation amount also, for deficiency, and therefore it may not be proper, to penalize the first opposite party doubly, which is not permissible under law, as held by the National Commission. In this view of the matter, as urged before us, the compensation is liable to be upset, concluding the complainant is not, entitled to both compensation and interest and we detain interest alone, setting aside compensation part. 9. In the result, the appeal is allowed in part, confirming the order of the District Forum in CC.No.82/2008 dt.8.7.2010, regarding the refund of the amount, with interest alone, setting aside the order of compensation, confirming the cost. The parties are directed to bear their respective cost in the appeal.