Order Date: Not Specified
Order Name: Punjab Urban Planning & Development Authority vs. Prem Jindal
Case No.: R.P. No. 3422/2017
The National Consumer Disputes Redressal Commission, led by Mr. Subhash Chandra and AVM J. Rajendra, has issued an important ruling regarding the refund of deposits. The Commission emphasized that refunds should be both restitutionary and compensatory, starting from the date of the initial deposit.
Case Summary:
The complainant, who booked a flat with the Punjab Urban Planning & Development Authority (PUDA), initially paid ₹3,00,000 as earnest money and later added 15% of the total cost after being allotted a plot. Unfortunately, PUDA failed to commence development or deliver possession within the agreed timeframe. Despite multiple requests, the builder did not meet its obligations, causing the complainant significant distress. As a result, the complainant approached the District Commission, seeking ₹7,50,000 with 18% annual interest and ₹1,00,000 for mental harassment, citing service deficiency. The District Commission ruled in favor of the complainant. PUDA appealed to the State Commission of Punjab, which dismissed the appeal, prompting PUDA to file a revision petition with the National Commission.
Developer’s Arguments:
The developer contended that the plot was offered on an "as is where is" basis through a draw, as specified in the brochure, and disputes should be referred to the Chief Administrator, PUDA, per the Letter of Intent, thus excluding the Forum’s jurisdiction. They also alleged that the complainant concealed facts and should be estopped from filing the complaint. Additionally, the developer argued that the case involved complex legal and factual issues unsuitable for summary resolution under the Act. They acknowledged the payment but noted that development work had been awarded to a contractor. Lastly, they claimed the complaint was time-barred and sought its dismissal.
National Commission’s Observations:
The National Commission focused on determining the appropriate compensation and interest for the refund. Referring to the Supreme Court’s decision in Experion Developers Pvt. Ltd. vs. Sushma Ashok Shiroor, the Commission highlighted that interest on refunded amounts should be calculated from the initial deposit dates to be both restitutionary and compensatory. The Commission modified the previous orders, directing the developer to refund ₹4,50,000 to the complainant with 9% simple interest per annum, calculated from the respective deposit dates until payment is made. Additionally, the developer was ordered to pay ₹40,000 for litigation costs.
Takeaway:
This ruling underscores the importance of calculating interest on refunds from the date of initial deposits to ensure full compensation and restitution for the complainant. It serves as a crucial reminder for developers to adhere to their commitments and for consumers to understand their rights in such situations.
