M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA MERCHANT

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A It is an admitted position that between August 1989 and October 1993, Smt Gursharan Kaur and the complainant deposited a total sum of Rs 4,53,850 in the form of instalments. The respondents not only failed to complete the project within the stipulated time but also failed to return the instalments deposited by Smt Gursharan Kaur and the complainant. The amount was returned only along with the cancellation letter and, as mentioned above, the complainant had returned the pay order with the legal notice sent on 7-9-2005.

43. Though Section 12-B empowers the Tribunal to award compensation but no criteria has been laid down by the legislature for exercise of that power. However, keeping in view the fact that the construction of the flat was delayed by more than one decade and the amount of instalments deposited by Smt Gursharan Kaur and the complainant totalling Rs 4,53,850 was retained by the respondents for a period ranging from 15 years to more than 12 years, I feel that ends of justice would be served by directing the respondents to pay compound interest @ 15% per annum to the legal representatives of the complainant.

44. Accordingly, UTPE No. 90 of 2005 and CA No. 39 of E 2009 are disposed of in the following terms: (i) It is declared that the respondents have acted in violation of Sections 36-A(1)(i), (ii) and (ix) of the Act and they are guilty of unfair trade practice, (ii) The complainant’s prayer for directing the respondents to deliver possession of Flat B-301 in Siddharth Shila Apartments is rejected, (iii) The respondents are directed to pay compound interest @ 15% per annum to the legal representatives of the complainant. The interest shall be calculated on each instalment paid by Smt Gursharan Kaur and the complainant from the date of deposit till 30-4-2005 i.e. the date on which the allotment was cancelled, and (iv) The respondents shall pay Rs 4,53,850 and compound interest to the legal representatives of the complainant in terms of (iii) above within a period of three months from today. If

M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1135 MERCHANT [DINESH MAHESHWARI, J.]

the needful is not done, then the legal representatives of the complainant shall be entitled to file appropriate application for execution of this order.”

3. Since the facts have clearly emerged from what we have extracted above, we need not to go into the factual matrix. The contention of the appellant is that since the allotment has been cancelled, the appellant should be entitled to compound interest @ 15% from the original dates of payment from 1989 till the date of payment and there is no justification in limiting the interest to 30-4-2005.

4. It is the contention of the respondents, who have filed separate appeals arising from SLPs (C) Nos. 10484-85 of 2016 and SLPs (C) Nos. 10481-82 of 2016, that the company and the director have no liability to pay the compound interest even assuming that the appellant in Civil Appeals Nos. 5032-33 of 2016 is entitled to any compensation. It can be only the amount determined under Section 12-B of the Monopolies and Restrictive Trade Practices D Act, 1969 (for short “the Act”). Section 12-B reads as follows: “12-B. Power of the Commission to award compensation.— (1) Where, as a result of the monopolistic or restrictive, or unfair trade practice, carried on by any undertaking or any person, any loss or damage is caused to the Central E Government, or any State Government or any trader or class of traders or any consumer, such Government or, as the case may be, trader or class of traders or consumer may, without prejudice to the right of such Government, trader or class of traders or consumer to institute a suit for the recovery of any F compensation for the loss or damage so caused, make an application to the Commission for an order for the recovery from that undertaking or owner thereof or, as the case may be, from such person, of such amount as the Commission may determine, as compensation for the loss or damage so caused. G (2) Where any loss or damage referred to in sub-section (1) is caused to numerous persons having the same interest, one or more of such persons may, with the permission of the Commission, make an application, under that sub-section, for and on behalf of, or for the benefit of, the persons so interested, and thereupon the provisions of Rule 8 of Order 1 of the First H

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A Schedule to the Code of Civil Procedure, 1908 (5 of 1908), shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to the application before the Commission and the order of the Commission thereon. B (3) The Commission may, after an inquiry made into the allegations made in the application filed under sub-section (1), make an order directing the owner of the undertaking or other person to make payment, to the applicant, of the amount determined by it as realisable from the undertaking or the owner thereof, or, as the case may be, from the other person, as C compensation for the loss or damage caused to the applicant by reason of any monopolistic or restrictive, or unfair trade practice carried on by such undertaking or other person. (4) Where a decree for the recovery of any amount as compensation for any loss or damage referred to in sub-section D (1) has been passed by any court in favour of any person or persons referred to in sub-section (1), or, as the case may be, sub-section (2), the amount, if any, paid or recovered in pursuance of the order made by the Commission under sub- section (3) shall be set off against the amount payable under such decree and the decree shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, be executable for the balance, if any, left after such set off.”

5. We do not think that there needs to be any elaborate consideration of the meaning of the word “compensation” in terms of the amount referred to under the section. The amount referred to under the section is the amount @ 15% compound interest on the amount already deposited, as ordered [Manjeet Kaur Monga v. K.L. Suneja, 2015 SCC OnLine Comp AT 593] by the Tribunal. Merely, because a liquidated amount is not stipulated or determined by the G Tribunal, it cannot be said that it is not the compensation. Once the interest, as ordered by the Tribunal, is calculated that will be the amount of compensation referred to under Section 12-B of the Act.

6. During the course of hearing of the appeals another interesting point came up for consideration. It has been brought to the notice

M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1137 MERCHANT [DINESH MAHESHWARI, J.]

of this Court that when the builder company, the appellant in the appeals arising out of SLPs (C) Nos. 10484-85 of 2016, had taken the pay order from Citibank on 30-4-2005, the amount of Rs 4,53,750 covered by the pay order had actually been deducted from their current account. But at the same time, the amount had not been paid/received by the payee. In the instant case, the account-holder cancelled the pay order and requested for re-credit of the amount and, accordingly, it is seen that Citibank has re- credited the amount to the account only on 22-6-2016. It is the contention of the account-holder company that for the period the money was with the Bank, the account-holder is entitled to interest and that can be the compensation if at all that can be paid to the appellant in Civil Appeals Nos. 5032-33 of 2016 for the period after the cancellation of the allotment. We may, of course, take note of the submission of the builder that in terms of the principles of restitution under Section 144 CPC and on the general principle of restitution, the builder cannot be put to unmerited injustice and the appellant should not take the undue advantage as held by this Court in Citibank N.A. v. Hiten P. Dalal [Citibank N.A. v. Hiten P. Dalal, (2016) 1 SCC 411 : (2016) 1 SCC (Civ) 342] , as canvassed by the learned counsel appearing for the builder.

7. The learned counsel appearing for Citibank, inviting our reference to the additional affidavit contended that it is a fact that the money from the current account of the builder has been deducted on 30-4-2005 and it has not been paid to the payee. But, at the same time, it cannot be said that the money was enjoyed by the Bank, since being a pay order, at any moment the instrument is presented, the Bank was bound to honour the same and, therefore, only for the lapse on the part of either the payee or the account-holder for encashing or cancelling the instrument, the Bank cannot be saddled with any interest. It is also submitted by the learned counsel appearing for the Bank that they are governed by the instructions issued by Reserve Bank of India in that regard. G

8. We find from the order [Manjeet Kaur Monga v. K.L. Suneja, 2015 SCC OnLine Comp AT 593] of the Tribunal that both the issues have not been gone into, apparently because these aspects have not been canvassed and obviously because Citibank was not before the Tribunal. H

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A 9. To that limited extent we propose to send back the matters to the Tribunal. Therefore, these appeals are disposed of as follows: 9.1. Citibank N.A., represented by its Manager, Jeevan Bharti Building, 124, Connaught Circus, New Delhi will stand impleaded as additional respondent in the complaint before the Competition B Appellate Tribunal, New Delhi. 9.2. The builder shall pay the compensation worked @ 15% compound interest up to 30-4-2005. 9.3. Whether there should be any compensation and if so, what should be the amount payable after 30-4-2005 and whether Citibank C is liable to pay any interest to the account-holder by the Tribunal.

10. To the above limited extent, we remit the matters to the Competition Appellate Tribunal, New Delhi.

11. It will be open to the parties to take all available contentions in D respect of the issues remitted to the Tribunal.

12. With the above observations and directions, the appeals are disposed of.

13. Pending applications, if any, shall stand disposed of. There shall be no orders as to costs.” E 15.1. The observations and directions in paragraphs 6 to 11 in the aforesaid decision led to another round of litigation that culminated in the other decision of this Court in K.L Suneja (supra) wherein, ultimately, this Court declined any interest to the complainant after tender of the amount by the developer. In the given context, this Court observed, inter alia, as under: - “31. The provisions of Order XXI are applicable to decrees of civil court. However, they embody a sound policy principle, that if the amount is deposited, or paid to the decree holder or person entitled to it, the person entitled to the amount cannot later seek interest on it. This is a rule of prudence, inasmuch as the debtor, or person required to pay or refund the amount, is under an obligation to ensure that the amount payable is placed at the disposal of the person entitled to receive it. Once that is complete (in the form of payment, through different modes, including tendering a Banker’s Cheque, or Pay Order or Demand Draft, all H

M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1139 MERCHANT [DINESH MAHESHWARI, J.]

of which require the account holder/debtor to pay the bank, which would then issue the instrument) the tender, or ‘payment’ is complete.

32. In the present case, the complainant was aware that the Pay Order had been tendered by the developer to her; nevertheless she filed the original Pay Order with her complaint, and did not seek any order from the MRTP Commission at the relevant time. The pleadings in the complaint did not disclose that the Pay Order was filed in the Commission, to enable the developer to respond appropriately. In these circumstances, the developer’s argument that the rule embodied in Order XXI, Rule 4 CPC, is applicable, is merited. The developer cannot be fastened with any legal liability to pay interest on the sum of Rs. 4,53,750/- after 30th April 2005.

33. This court is also of the opinion that the complainant’s argument that on account of the omission of the developer, she was wronged, and was thus entitled to receive interest, cannot prevail. The records nowhere disclose any fault on the part of the developer; on the other hand, the complainant did not take steps to protect her interests. It has been held by this court, in Sailen Krishna Majumdar v. Malik Labhu Masih [Sailen Krishna Majumdar v. Malik Labhu Masih, (1989) 1 SCR 817] that in such cases, even if equities are equal, the court should not intervene: “Equity is being claimed by both the parties. Under the circumstances we have no other alternative but to let the loss lie where it falls. As the maxim is, ‘in aequali jure melior est conditio possidentis’. Where the equities are equal, the law should prevail. The respondent’s right to purchase must, therefore, prevail.”

34. In the present case too, the complainant cannot claim interest from the developer, who had returned the Pay Order. As discussed, at the time of filing of the complaint, she could have chosen one among the various options to ensure that the amount presented to her was kept in an interest-bearing account, without prejudice to her rights to claim interest later. In these circumstances, no equities can be extended to her aid.

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A 35. As regards the complainant’s appeal, the contention is that the impugned order is in error, because the Tribunal ought to have directed that the developer ought to have been directed to pay interest on the sum of Rs. 4,53,750/- from 4th October 1993 till the date of its realization i.e., 7th May 2016. This plea is plainly untenable, because the interest payable for the past period was B concluded in the previous proceedings. The complainant did not point to any rule or binding legal principle which obliged the developer to pay such interest, or justify the direction in the impugned order, by showing how such liability arose in the facts and circumstances of this case.” C 15.2. The said case of Dr. Manjeet Kaur Monga had been of claiming compensation under the provisions of MRTP Act whereas the present one is a case of claiming compensation under the Consumer Protection Act, 1986. Hence, a comparison of the provisions of Section 14(1)(d) of the Act of 1986 and Section 12-B(3) of MRTP Act, as regards D powers of respective fora, shall be apposite and could be made as under:-

16Copy pinpoint16. The question is as to whether the aforesaid decision in Dr. Manjeet Kaur Monga could be read as laying down a principle of universal applicability that in such matters of dealing in real estate, the 8 The proviso aforesaid was inserted by Act 62 of 2002 with effect from 15.03.2003 H

M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1141 MERCHANT [DINESH MAHESHWARI, J.]

question of compensation or damages could be determined invariably by A awarding compound interest whenever the deposited money is to be returned by the builder or developer in case of default in carrying out its obligations under the agreement and in failing to deliver the property envisaged by the agreement. In our view, the answer could only be in the negative. B 16.1. It is at once clear on a bare look at the aforesaid decision of this Court in Dr. Manjeet Kaur Monga that therein, the Competition Appellate Tribunal, while exercising powers under Section 12-B of the MRTP Act, directed the builder to pay compound interest at rate of 15% p.a. from the date of deposit and until the date on which allotment was cancelled. There were cross appeals in this Court. The complainant in her appeals questioned the award of compound interest only until the date of cancellation and sought the same until the date of payment. On the other hand, the builders, that is, the present appellants, contended that they could not be made liable to pay compound interest because even if the complainant was entitled to any compensation, it could only be that of the amount determined under Section 12-B MRTP Act. In this background and in regard to such contentions of the present appellants, this Court observed that there was no need for any interpretation of the meaning of the term “compensation” because once the amount of interest as ordered by COMPAT was calculated, that would be the compensation referred to under Section 12-B of the MRTP Act; and merely because liquidated amount was not stipulated or determined by COMPAT, it could not be said that the awarded amount was not that of compensation. This all was said by this Court, as could be noticed from paragraph 5 in the extraction aforesaid. In the subsequent passages, this Court adverted to another peculiar feature of this case where the amount of pay order, despite being deducted from current account of appellants, did not reach the payee and re-credit was allowed by the bank more than 11 years later; and as the bank was not a party to the litigation, the said aspect was remitted for consideration of COMPAT. 16.2. In the aforesaid decision in Dr. Manjeet Kaur Monga by this Court, the question was not raised as to whether compound interest could be granted as a measure of compensation nor this Court decided so. The question raised had been the other way round that COMPAT had not specified the amount of compensation payable, to which, this Court observed that calculating the amount as per directions of COMPAT would lead to the quantum of compensation. H

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17Copy pinpoint17. What has been argued before us on behalf of respondent is essentially on the basis of the relief granted by COMPAT to the said complainant Dr. Manjeet Kaur Monga, which was not interfered with by this Court. That aspect, in our view, only relates to the conclusion of the decision and not to its ratio decidendi. B 17.1. It has rightly been argued on behalf of the appellants that a judgment is an authority only in regard to its ratio which is required to be discerned; and a decision cannot be regarded as an authority in regard to its conclusion alone or even in relation to what could be deduced therefrom. In Sanjay Singh (supra), a 3-Judge Bench of this Court has explained these principles in clear terms as follows: - C “10. The contention of the Commission also overlooks the fundamental difference between challenge to the final order forming part of the judgment and challenge to the ratio decidendi of the judgment. Broadly speaking, every judgment of superior courts has three segments, namely, (i) the facts and the point at issue; (ii) the reasons for the decision; and (iii) the final order containing the decision. The reasons for the decision or the ratio decidendi is not the final order containing the decision. In fact, in a judgment of this Court, though the ratio decidendi may point to a particular result, the decision (final order relating to relief) may be different and not a natural consequence of the ratio decidendi of the judgment. This may happen either on account of any subsequent event or the need to mould the relief to do complete justice in the matter. It is the ratio decidendi of a judgment and not the final order in the judgment, which forms a precedent.”

18Copy pinpoint18. Keeping the principles aforesaid in view and for what has been discussed hereinbefore in regard to ratio decidendi of the decision in Dr. Manjeet Kaur Monga, it is but clear that the said decision cannot be read in support of the principle that compensation and/or punitive damages in terms of the Act of 1986 could also be by way of compound interest. As noticed, the State Commission has awarded compound interest, and National Commission has approved such awarding of compound interest to the present respondent, only with reference to the said decision in the case of Dr. Monga. When we do not find ratio decidendi of Dr. Monga leading to the enunciation in favour of awarding compensation and/or punitive damages by way of compound interest, the substratum of the orders impugned is knocked to the ground.

M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1143 MERCHANT [DINESH MAHESHWARI, J.]

The complexities of present matter requiring further exploration

19Copy pinpoint19. However, the complexities of the present matter are that even the observations and conclusions foregoing cannot be taken as decisive of the matter. It is because of the other pertinent factors that in Dr. Monga’s case, compound interest was indeed awarded against the very same builders in relation to the very same project. The respondent asserts to be identically situated and rather having suffered excessive losses for a longer period of time. The respondent has been awarded compound interest at rate of 14%. The frequency of compounding has not been specified but, we may take it as that of yearly rests. In the circumstances, the question to be addressed is as to whether compound interest could have been allowed in this case under the Act of 1986 and if so, until which date and for what period. Therefore, a little further exploration is requisite.

20Copy pinpoint20. The submissions on behalf of the appellants that wherever the legislature considered it permissible to award compound interest it has provided so in the enactment, has its own limitations. The illustrations placed before this Court by the learned counsel for the appellants concerning different enactments, though make it clear that in certain eventualities, the legislature has indeed specified the award of compound interest. Mostly, it has been provided so in relation to any monetary involvement having the trappings of public interests in it. The Act of 1986, on the other hand, being a beneficial legislation, inter alia, empowers the Consumer Fora to direct payment of such amount as may be awarded as compensation to the consumer for any loss or injury suffered due to the negligence of the opposite party. The proviso added to Clause (d) of Section 14(1) of the Act of 1986 empowers the Forum to grant punitive damages in such circumstances as it deems fit. That being the position, it cannot be laid down in absolute terms that for no such stipulation regarding compound interest being available in the Act of 1986, the same can never be granted by the Consumer Fora. Equally, when the matter is being considered for award of compensation and/or punitive damages, want of stipulation in the contract as regards award of compound or simple interest, cannot be decisive of the matter. 20.1. In the case of Clariant International Ltd. (supra), the Court was considering the power of Securities & Exchange Board of India to direct payment of compensation and interest to the shareholders of the H

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A target company because of delay in or failure to make public offer after takeover. This Court, inter alia, held that in the absence of any agreement or statutory provision or mercantile usage, interest payable could only be at the market rate; and the interest could be payable upon establishing totality of circumstances justifying exercise of such equitable jurisdiction. This Court, inter alia, observed and held as under: - B “30. Interest can be awarded in terms of an agreement or statutory provisions. It can also be awarded by reason of usage or trade having the force of law or on equitable considerations. Interest cannot be awarded by way of damages except in cases where money due is wrongfully withheld and there are equitable grounds C therefor, for which a written demand is mandatory.

31. In absence of any agreement or statutory provision or a mercantile usage, interest payable can be only at the market rate. Such interest is payable upon establishment of totality of circumstances justifying exercise of such equitable jurisdiction. D (See Municipal Corpn. of Delhi v. Sushila Devi [(1999) 4 SCC 317] , SCC para 16.)

32. In Executive Engineer, Dhenkanal Minor Irrigation Division v. N.C. Budharaj [(2001) 2 SCC 721] Raju, J. speaking for the majority held that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation by whatever name it may be called, namely, interest, compensation or damages.” 20.2. In the case of Central Bank of India (supra), the Constitution Bench of this Court essentially dealt with the question as to the meaning to be assigned to the phrases “the principal sum adjudged” and “such principal sum”, as occurring in Section 34 of the Code of Civil Procedure, 1908. The Constitution Bench answered the reference in the following terms: - “58. Subject to the above we answer the reference in the following terms: (1) Subject to a binding stipulation contained in a voluntary contract between the parties and/or an established practice or usage interest on loans and advances may be charged on periodical rests and also capitalised on remaining unpaid. The principal sum actually advanced coupled with the interest on periodical rests so capitalised

M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1145 MERCHANT [DINESH MAHESHWARI, J.]

is capable of being adjudged as principal sum on the date of the suit. (2) The principal sum so adjudged is “such principal sum” within the meaning of Section 34 of the Code of Civil Procedure, 1908 on which interest pendente lite and future interest i.e. post-decree interest, at such rate and for such period which the court may deem fit, may be awarded by the court.” 20.2.1. The said case, essentially on enunciation of the principles relating to charge of interest by a creditor with reference to stipulation in the contract, or by a practice or usage when established, subject to the statutory provision, does not have an application to the question at hand. C

21Copy pinpoint21. On the other hand, the observations made by this Court in the case of Indian Council for Enviro-Legal Action (supra), which have been extensively relied upon by the learned counsel for the respondent cannot as such be applied to the case at hand either. In the said case, this Court dealt with the principles governing compensation for the loss suffered by citizenry due to pollution and the ‘polluter pays’ principle. Such observations, essentially relating to public law remedies under inherent powers of this Court, are difficult to be applied to the case of the present nature, essentially emanating from the allegations of breach of contract. In other words, the observations of this Court as regards disgorgement of all the benefits arrived at by the wrongdoer and restitution in full and effective form are difficult to be directly applied to the nature of claim in the present case. The set up and background in which the Court made the observations could be noticed from paragraph 169 of the said decision that reads as under: - “169. In the point under consideration, which does not arise from F a suit for recovery under the Code of Civil Procedure, the inherent powers in the court and the principles of justice and equity are each sufficient to enable an order directing payment of compound interest. The power to order compound interest as part of restitution cannot be disputed, otherwise there can never be restitution.” G 21.1. A few other referred paragraphs of the said decision may also be reproduced, which read as under: - “177. This Court in Alok Shanker Pandey v. Union of India [(2007) 3 SCC 545] observed as under: (SCC p. 547, paras 8 and 9) H

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A “8. We are of the opinion that there is no hard-and-fast rule about how much interest should be granted and it all depends on the facts and circumstances of each case. We are of the opinion that the grant of interest of 12% per annum is appropriate in the facts of this particular case. However, we are also of the opinion that since interest was not granted to the appellant along with the principal amount, the respondent should then in addition to the interest at the rate of 12% per annum also pay to the appellant, interest at the same rate on the aforesaid interest from the date of payment of instalments by the appellant to the respondent till the date of refund on this amount, and the entire amount mentioned above must be paid to the appellant within two months from the date of this judgment.

9. It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital.”

178. To do complete justice, prevent wrongs, remove incentive for wrongdoing or delay, and to implement in practical terms the concepts of time value of money, restitution and unjust enrichment noted above—or to simply levelise—a convenient approach is calculating interest. But here interest has to be calculated on compound basis—and not simple—for the latter leaves much uncalled for benefits in the hands of the wrongdoer.

179. Further, a related concept of inflation is also to be kept in mind and the concept of compound interest takes into account, by reason of prevailing rates, both these factors i.e. use of the money and the inflationary trends, as the market forces and predictions work out.

180. Some of our statute law provide only for simple interest and not compound interest. In those situations, the courts are helpless and it is a matter of law reform which the Law Commission must take note and more so, because the serious effect it has on the administration of justice. However, the power of the Court to order compound interest by way of restitution is not fettered in any way. We request the Law Commission to consider and recommend necessary amendments in relevant laws.” H

M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1147 MERCHANT [DINESH MAHESHWARI, J.]

21.2. The observations aforesaid, as occurring in the referred A decision in the case of Alok Shankar Pandey (supra) make it clear that there could be no hard and fast rule as to how much interest should be granted and it would depend on the facts and circumstances of each case. However, interest is not considered to be a penalty or punishment but is considered to be a normal accretion on capital. B 21.3. The decision of English Courts cannot be taken as instructive in view of the principles available in the decisions of this Court and the entirely different socio-economic factors. Hence, we do not propose to dilate on the decision in the case of Wallersteiner (supra) as cited by the learned counsel for the respondent but, this much is apparent from the said decision too that in the absence of statutory provisions, the principles of equity have been invoked for awarding interest.

22Copy pinpoint22. The synthesis of the cited decisions aforesaid, for the present purpose, leads to the result that none of these decisions could be taken as guide for award of compound interest in an action before the Consumer Fora under the Act of 1986. In regard to such cases, in our view, the forum would be entitled to provide for the amount of compensation as deemed fit, having regard to the facts and circumstances of the case and the gravity of the negligence of the opposite party and consequential injury suffered by the consumer. The forum could award even punitive damages but that would depend on the relevant circumstances and for that matter, the relevant factors shall have to be specified. In regard to such awarding of compensation and/or punitive damages, the forum concerned could take all the relevant factors into account and award such amount as deemed fit and necessary but ordinarily, in the matters of money refund, awarding of compound interest as a measure of punitive damages is not envisaged. As to what would be the quantum of compensation and for that matter, what would be the quantum of punitive damages, would depend on facts and circumstances of each case but while awarding so, the forum would be advised to specify all the relevant factors and basis of its quantification. A shortcut of awarding compound interest is neither envisaged by the statute nor do we find any such term of contract between the parties or any such usage. As noticed, the attempt to seek compound interest in such real estate dealings did not meet with approval of this Court and in the case of Ireo Grace Realtech (supra) such a claim was declined by a 3-Judge Bench of this Court for having no nexus with the commercial realities of the prevailing market. Going H

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A by the principles governing the nature of jurisdiction of the Consumer Fora as also the principles enunciated by this Court including those in the 3-Judge Bench decision, we need to disapprove the proposition of awarding compound interest in the cases of monetary refund in such dealings.

23Copy pinpoint23. Several submissions made on behalf of the respondent as to the alleged advantage derived by the appellants by retention of money, again, cannot lead to award of compound interest while ordering refund. For award of compound interest, relevant factors shall have to be taken into account which would include uncertainties of market and several other imponderables. We would hasten to observe that if at all by way of C compensation, the Consumer Forum considers it proper to examine the time value for money, an in-depth and thorough analysis would be required while taking into account all the facts and the material surrounding factors, including those of realities as also uncertainties of market.

24Copy pinpoint24. In our view, awarding of compound interest with reference to D Dr. Monga’s case and without examining any other factor has led to serious inconsistencies; and if the award as made is approved, it could only lead to unjust enrichment of the respondent in the name of disgorgement of benefits purportedly derived by the appellants. As noticed, the State Commission and the National Commission have passed E rather assumptive orders on the basis of the decision in Dr. Monga that compound interest was required to be allowed. Various factors recounted on behalf of the respondent, including excessive harassment and denial of the fruits of her investment could all lead to a reasonable amount of compensation but, there appears absolutely no reason that compound interest be allowed in this matter. F

25Copy pinpoint25. Having regard to the order proposed to be passed, we are not entering into the minute calculations and variety of alternatives presented by the parties before us but, on a broad consideration of the matter, it is clear that even as per the exemplar sale deeds relating to the same area and similar flats, the cost of 3 flats booked by the respondent, as at G present, is in the range of 2.25 crore, whereas the amount payable under the award in question would be above Rs. 7.35 crore. The respondent has attempted to compare the circle rates of the land in the area in question with the submissions that there were no circle rates of the flats in the year 1989 and the attempt on her part was to make “apples-to- H apples” comparison and then factorising on the cost of flats. In the first

M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1149 MERCHANT [DINESH MAHESHWARI, J.]

place, no such efforts of calculation and assessment were made before the State Commission or the National Commission by the respondent. Secondly, the said Consumer Fora have not returned cogent and convincing findings on the loss or injury of the respondent with reference to the relevant factors. We have referred to these aspects only to indicate that award of compound interest in the present case had neither any foundation in the record nor any backing in law nor the Consumer Fora took care to examine the contours of their jurisdiction and the requirements of proper assessment, if at all any compensation and/or punitive damages were sought to be granted. The impugned orders are difficult to be sustained.

26Copy pinpoint26. Even while we have disapproved the award of compound interest by the Consumer Fora in the cases of the present nature, there is yet another factor for which the impugned orders are required to be interfered with. As noticed, the State Commission merely referred to the decision of COMPAT in Dr. Monga’s case and then referred to the prayer of the respondent for award of compound interest coupled with the fact that possession cannot be handed over to her. On this and with reference to the observations in the case of Malay Kumar Ganguly (supra)9, for awarding compensation with such sum of money as to put the wronged person in the position as he would have been if he had not sustained the wrong, the State Commission straightaway jumped to the conclusion of awarding compound interest @ 14%. Apart from other shortcomings as noticed above, the State Commission, even while awarding compound interest @ 14%, did not even take into account the fact of attempted refund of money by the appellants by the cheque dated 08.11.2005 and did not specify the period of such operation of compounding of interest. The open-ended and the assumptive order by the State Commission had been bereft of logic and had been wanting in the requisite reasoning as also specification of the relief sought to be granted. The position in the National Commission had been no better and in fact, the Commissions proceeded as if nothing else was required to be considered because of Dr. Manjeet Kaur Monga’s case. G 9 Malay Kumar Ganguly had been a case relating to compensation on account of medical negligence. The referred passage in the said decision reads as under: - “Indisputably, grant of compensation involving an accident is within the realm of law of torts. It is based on the principle of restitution in interregnum. The said principle provides that a person entitled to damages should, as nearly as possible, get that sum of money which would put him in the same position as he would have been if he had not sustained the wrong.” H

p. 1150 Copy page pinpoint

A In extraordinary measure, money received by respondent allowed to be retained

27Copy pinpoint27. For what has been discussed hereinabove, the impugned orders are required to be set aside. However, as indicated, the pertinent factors are that Dr. Monga’s case related to the very same project and very B same builder with similar grievance of the complainant. In the said case, award of compound interest until the date of attempted refund by the builders has attained finality. In this view of the matter, even while disapproving the proposition of providing compound interest as such, we deem it appropriate to take into consideration, only for the purpose of the present case, the other requirements of balancing the equities. C 27.1. For the peculiar factors of the present case, we are inclined to examine the matter with reference to the alternative submission on the part of the appellants that if at all awarding of compound interest was to be considered, their efforts to make refund of the sum of Rs. 10,68,031/- on 08.11.2005 by way of a cheque cannot be ignored. It has D been argued in this regard on behalf of the respondent that the said cheque was promptly returned by the respondent and accepted by the appellants. Such return of cheque by the respondent and acceptance by the appellants is not decisive of the matter. The relevant aspect of the matter is that the appellants indeed attempted to refund the said sum of E Rs. 10,68,031/- on 08.11.2005. Even if the respondent was within her right to decline the offer, in our view, if at all compounding of interest was to be allowed, that could not have run beyond 08.11.2005, at least in regard to the said sum of Rs. 10,68,031/-. Put in other words, even when we may not find fault with stance of the respondent in refusing to accept such an offer of refund, particularly when she was desirous of the flats rather than money refund, the appellants cannot be saddled with any liability to pay compound interest over the amount offered by them beyond the date of their offer. The Consumer Fora have failed to consider that when the appellants had indeed offered to pay the money and sent the cheque on 08.11.2005, it would be bringing about negative imbalance if such an effort on the part of the appellants was to be ignored altogether and compounding of interest was continued beyond 08.11.2005. 27.2. When the amount payable by the appellants with reference to the principles and propositions aforesaid is calculated, in our view, it does not exceed the amount of Rs. 2,48,52,000/- together with accrued interest, which has already been received by the respondent pursuant to

M/S SUNEJA TOWERS PRIVATE LIMITED & ANR. v. ANITA 1151 MERCHANT [DINESH MAHESHWARI, J.]

the order passed by this Court on 09.05.2022. Keeping in view the peculiar circumstances of this case, as an extraordinary measure, we propose to allow the respondent to retain the amount so received. 27.3. However, we would hasten to observe that the respondent is being allowed to retain the sum of money already received by her only because of peculiar circumstances of this case and else, this relaxation for the respondent is in no manner to be read as approval of the orders impugned or approval of the proposition of awarding compound interest in these matters. As said and iterated hereinbefore, such a proposition of awarding compound interest in these matters by the Fora exercising jurisdiction under the Act of 1986 stands disapproved. C Conclusion

28Copy pinpoint28. Accordingly and in view of the above, these appeals succeed and are allowed. The impugned orders passed by the State Commission and National Commission are disapproved. Having regard to the peculiar circumstances of this case, the amount already received by the respondent D in the sum of Rs. 2,48,52,000/- together with accrued interest is allowed to be retained by her but, we make it clear that the appellants shall not be required to make any further payment to the respondent, whether towards refund or towards compensation or towards interest. The parties are left to bear their own costs of these appeals. E

Nidhi Jain Appeals allowed. (Assisted by : Rakhi, LCRA)