Refunded Amount Should Be Paid From Date Of Deposit To Ensure Restitution: NCDRC

Brief Facts of the Case

The complainant booked a flat with the Punjab Urban Planning & Development Authority/developer and paid ₹3,00,000 as earnest money. After being allotted a plot, he paid an additional 15% of the total amount. However, the builder failed to begin development or hand over possession within the promised period. Despite requests, the builder did not fulfill its obligations, causing the complainant harassment and mental agony. The complainant filed a complaint before the District Commission and claimed ₹7,50,000 with 18% interest per annum and ₹1,00,000 as compensation for mental harassment, citing deficiency in service. The District Commission allowed the complaint, following which the developer appealed to the State Commission of Punjab which dismissed the appeal. Consequently, the developer filed a revision petition before the National Commission.

Contentions of the Developer

The developer argued that the plot was allotted on an “as is where is” basis through a draw, as stated in the brochure. Disputes were to be referred to the Chief Administrator, PUDA, per the Letter of Intent, barring the Forum's jurisdiction. The developer also claimed the complainant concealed facts and was estopped from filing the complaint due to their own actions. They argued that the case involved complex legal and factual issues that cannot be addressed summarily under the Act. While acknowledging the complainant's payment of 15% of the sale price, the developer noted that a contractor had awarded development work. They contended the complaint was time-barred and prayed for its dismissal.

Observations by the National Commission

The National Commission observed that the primary issue at this stage was determining the appropriate compensation and interest applicable to the refund owed to the complainant. The Hon'ble Supreme Court, in Experion Developers Pvt. Ltd. vs Sushma Ashok Shiroor, clarified that for interest on refunded amounts to be both restitutionary and compensatory, it must be calculated from the dates when the deposits were initially made. The Court noted that granting interest from the date of the last deposit does not constitute full restitution. In light of this precedent, the Commission allowed the revision petition and modified the previous orders issued by the District Forum and the State Commission. The developer was ordered to refund Rs. 4,50,000 to the complainant, along with simple interest at a rate of 9% per annum, calculated from the respective dates of the deposits until the payment is made. Furthermore, the developer was directed to pay Rs. 40,000 as compensation for litigation costs.

Case Title: Punjab Urban Planning & Development Authority Vs. Prem Jindal

Case Number: R.P. No. 3422/2017

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