Whether payment made to builder for purchase of flats which is arbitrarily cancelled can lead to refund with compound interest

Suneja Towers Private Limited & Anr. Vs Anita Merchant (Supreme Court)

In these appeals by special leave, the appellants have essentially questioned a part of the common judgment and order dated 31.03.2022, as passed by the National Consumer Disputes Redressal Commission, New Delhi¹ in Revision Petition Nos. 771 of 2020, 772 of 2020 and 773 of 2020, whereby the National Commission has declined to interfere in the common judgment and order dated 12.03.2020, as passed by the State Consumer Disputes Redressal Commission, Delhi², in Appeal Nos. 121 of 2014, 122 of 2014 and 123 of 2014.

2.1. The present set of appeals has its genesis in the three complaints filed by the complainant-respondent before the Consumer Disputes Redressal Forum-II, New Delhi³, bearing Nos. C-252 of 2006, C-283 of 2006 and C-284 of 2006 alleging deficiency of service on the part of the present appellants for having failed to deliver the possession of three flats booked by her, even after expiry of the agreed period and despite the fact that she had admittedly made payment of 60% of the total sale consideration. The District Forum, in its order dated 20.12.2013, dismissed the complaints so filed by the present respondent on various grounds including that she had tried to avail of the services of the builder for commercial purposes by booking three flats and thus, did not fall within the category of “consumer”, as defined under Section 2(d) of the Consumer Protection Act, 1986⁴.

2.2. In the said judgment and order dated 12.03.2020, the State Commission, however, disapproved the order so passed by the District Forum as regards the maintainability of complaints and then, particularly with reference to the decision in the case of Dr. Manjeet Kaur Monga v. K.L. Suneja: (2018) 14 SCC 679⁵, wherein the award of compound interest by Competition Appellate Tribunal⁶ under the Monopolies and Restrictive Trade Practices Act, 1969⁷ was not interfered with by this Court, granted relief to the complainant in the manner that the appellants shall refund the amount deposited by her together with ‘compound interest at the rate of 14% from the date of deposit’. The National Commission rejected all the contentions urged on behalf of the appellant against the order so passed by the State Commission and also found no reason to interfere with the relief granted by the State Commission in view of the decision of this Court in the case of Dr. Manjeet Kaur Monga (supra).

3. On 09.05.2022, while considering the petitions leading to these appeals at the initial stage, this Court found the question of awarding compound interest @ 14% on the refund of deposited amount requiring consideration and hence, notice was issued to this limited extent. However, this Court also took note of the fact that a sum of Rs. 1,48,52,000/- had been deposited by the appellants pursuant to an order earlier passed by the National Commission and, in the totality of circumstances, execution of the orders impugned was stayed subject to the condition of the petitioners-appellants depositing a further sum of Rs. 1 crore with the District Forum within four weeks with liberty to the respondent to withdraw the deposited amount with accrued interest. Such deposit and withdrawal were, however, made subject to the final orders of this Court. The order dated 09.05.2022 reads as under: –

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