REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 2892-2894 OF 2023
(ARISING OUT OF SLP (CIVIL) NOS. 8163-8165 OF 2022)

M/S SUNEJA TOWERS PRIVATE

LIMITED & ANR. ….APPELLANT(S)

VERSUS

ANITA MERCHANT ….RESPONDENT(S)

JUDGMENT

DINESH MAHESHWARI, J.

Table of Contents

Preliminary and brief outline ............................................................................................ 2

Relevant factual and background aspects ......................................................................... 5
The State Commission awarding compound interest ....................................................... 11
Approval by the National Commission ............................................................................ 17
Rival Contentions ........................................................................................................... 19
Matters of form and pleading not relevant in the present case ....................................... 35
The cited decisions on award of interest in real estate dealings....................................... 37
The decision in Manjeet Kaur Monga’s Case and its connotations ................................... 45
The complexities of present matter requiring further exploration ................................... 57
Signature Not Verified
In extraordinary measure, money received by respondent allowed to be retained .......... 67
Digitally signed by
Neetu Khajuria
Date: 2023.04.18
Conclusion...................................................................................................................... 69
17:14:56 IST
Reason:

1
Preliminary and brief outline

Leave granted.

2. 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

1 Hereinafter also referred to as ‘the National Commission’.

2 Hereinafter also referred to as ‘the State Commission’.
3 Hereinafter also referred to as ‘the District Forum’.

2
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 679 5 , wherein the award of compound

interest by Competition Appellate Tribunal 6 under the Monopolies and

Restrictive Trade Practices Act, 1969 7 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

4 Hereinafter also referred to as ‘the Act of 1986’.

5 Reference to this case has occurred at multiple places hereafter; where it has been referred to
as the case of ‘Dr. Manjeet Kaur Monga’ or the case of ‘Dr. Monga’.
6 ‘COMPAT’, for short.
7 Hereinafter also referred to as the ‘MRTP Act’.

3
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: -

“Having heard learned senior counsel for the respective parties

preliminarily and having examined the material placed on record,
in our view, only the question of awarding compound interest at
the rate of 14% on the refund of deposited amount is required to
be considered in this matter.
Issue notice to the limited extent as above.
Ms. Supriya Juneja, learned counsel accepts notice on behalf
of the respondent No. 1.
Counter affidavit may be filed within three weeks.
The petitioners shall have one week thereafter to file rejoinder
affidavit, if so chosen.

4
 During the course of submissions, we have been informed that
pursuant to the order dated 11.11.2020, as passed by the National
Consumer Disputes Redressal Commission, the petitioners had
deposited an amount of Rs.1,48,52,000/- with the President,
District Consumer Disputes Redressal Forum-II, New Delhi on
25.11.2020.
Learned senior counsel appearing for the petitioners submits
that as per his instructions, the said amount has been invested in
a fixed deposit.
Having regard to the circumstances of the case, it is considered
appropriate and hence provided in the interim that until further
orders of this Court, execution of the orders impugned shall
remain stayed, subject to the condition that the petitioners shall
deposit further an amount of Rs. 1 crore with the said District
Consumer Disputes Redressal Forum within four weeks from
today.
It shall be permissible for the respondent herein to withdraw the
entire deposited amount, including the earlier deposited amount of
Rs.1,48,52,000/- together with accrued interest.
This deposit by the petitioners and withdrawal by the
respondent shall remain subject to the final order to be passed in
these petitions.
List these petitions in the second week of July, 2022.”

4. After completion of pleadings, and in view of a short point

involved, we have heard learned counsel for the parties finally at this

stage itself.

Relevant factual and background aspects

5. As noticed, the only question involved in these appeals is about

the legality and validity of the directions by the State Commission to the

appellants to refund the deposited amount to the respondent with

compound interest. The relevant factual and background aspects, to the

extent relevant for the short question involved in the matter could be

noticed as follows:

5
5.1. The appellant No. 1 is said to have launched a residential project

namely Siddharth Shila Apartments at Plot No. 24, Vaishali, Ghaziabad,

Uttar Pradesh. The appellant No. 2, K.L. Suneja is said to be the Director

of the appellant No. 1. On 01.08.1989, the respondent, a Non-Resident

Indian, applied for allotment of three flats in the said project and pursuant

thereto, the appellant No. 1 issued allotment letter in her favour,

purportedly allotting three residential flats bearing Nos. C-601, C-602 and

C-603 admeasuring 1375 sq. ft. each (including common areas) for a

consideration of Rs. 7,37,000/-, Rs, 7,35,625/- and Rs. 7,35,625/-

respectively. The entire consideration was payable by the respondent in

12 instalments. It has been the case of the appellants that the respondent

made payment up to 6th instalment but, defaulted thereafter and did not

make remaining payment despite numerous reminders.

5.2. On 15.10.2005, the respondent issued a notice to the appellants,

stating, inter alia, that even after 16 years, the appellants had kept the

allottees waiting despite having received more than 60% of the total cost

of the respective flats. It was also stated that she could make further

payment towards the remaining instalments but was having legal right to

know as to when the construction would be completed and the

possession would be handed over; and without disclosing such essential

facts, retaining the deposited money amounted to deficiency in service in

terms of Section 2 of the Act of 1986. The respondent called upon the

6
appellants to furnish within 15 days a written undertaking supported by a

progress certificate from the architect concerned as to when the said flats

would be completed or else, she would be approaching the proper forum

under the relevant provisions of law against them. The relevant contents

of this notice read as under: -

“5) That it is further needless to mention here that an allottee like

my said clientess, who has already invested more than 60% of the
total cost of the respective flats, certainly can make further
payment towards the remaining instalments but at least the
allottees at large are having legal rights to know as to when the
said flats will be completed and the possession be handed over to
them, and without disclosing the same from your side, and
keeping the money collected amounts to deficiency in service as
per Section 2 of the Consumer Protection Act for which my said
clientess shall have right to invoke the jurisdiction of the
competent forum.
6) That without prejudice to the above, my client is ready to make
the payment of balance instalments as per the statement of
account subject to the undertaking of proposed completion of the
said flat and further production of written progress certificate from
the architect concerned of yours because my clientess shall not be
kept in dark for period not known to her within which she is going
to take possession of the flat.
7) That it is further to mention here that as per the various
landmark pronouncements of National Commission as well as
State Commissions of various states, in the said facts and
circumstances, you are certainly liable to be prosecuted and also
liable to the damages and interest thereon.
In light of the above facts and circumstances, I do hereby call
upon you which I hereby do and call upon you, to furnish or
produce a written undertaking supported by a progress/completion
certificate from your concerned architect within which the said flats
shall be completed, within a period of 15 days from the date of the
present legal notice, failing which I have clear instructions from my
said clientess to invoke the proper forum under the relevant
provisions of law against you.
Without prejudice to the above, my said clientess shall have
other legal rights against you as advised in law.”

7
5.3. In reply to the aforesaid notice, the appellants stated details of

payment made by the respondent and it was alleged that it had been a

matter only of provisional allotment and no agreement as such was

executed between the parties; and the allotment had been cancelled due

to default on her part. After tabulating the payment made and the alleged

dues, it was also stated on behalf of the appellants that they were ready

to refund the amount by way of cheque but the respondent was seeking

refund in cash, which was unjustified. However, a cheque in the sum of

Rs. 10,68,031/- was sent towards refund with the said reply dated

08.11.2005 while stating, inter alia, as under: -

“2. From the aforesaid it will be apparent that not only did your
client not make the payments within time, but also failed to pay the
interest and thereafter stopped making any payments whatsoever
in spite of reminders. As in 2002 a sum of Rs 8,22,682.00 (Rupees
Eight Lacs Twenty Two Thousand Six Hundred Eighty Two only)
was due from your Client and against which your Client sent in
early Feb. 2002 total sum of Rs 30,000/- (Rupees Thirty Thousand
only) and again in end of Feb. 2002 a total sum of 45,000/- which
was returned by my Clients since the allotment stood cancelled
due your Client is aware of the allotment having stood cancelled,
at least since the year 2002 and the notice now got sent is with
ulterior motives. No payments as falsely alleged were even
tendered in January, 2004 or after Feb. 2002. In last your Client
pursuant to the cancellation of the allotment wanted the refunds in
terms of the provisional Allotment of the sum of Rs 10,68,031.00
(Rupees Ten Lacs sixty Eight Thousand Thirty One) only in cash
only which my Clients refused and offered to pay the cheque for
the said amount, however, your Client pleaded with my Clients
that they had not accounted for the payments made to my Clients
and as such could not take back the Cheque in refund and thus
were demanding the case However my Clients did not want to be
privy to the illegal acts of your client and refused to comply with
the demand of your client to pay the cash. It is for this reason that
the notice has been issued on totally wrong facts and demands.

8
 3. All the other contents of your notice are incorrect and are
denied and my clients are along with this reply enclosing their
Cheque No. 357757 dated 07 November 2005 of Citibank NA New
Delhi for a sum of Rs 10,68,031.00 (Rupees Ten Lakhs Sixty Eight
Thousand Thirty One) only in favour of your client towards refund
of the amounts due to them under the Letter of Provisional
Allotment. Please further note that there never was any
Agreement between your Client and my Clients and in accordance
with the accepted practice or the trade your client had only made a
provisional booking when the project or my clients was at a
nascent stage and when there was no certainty and when no flats
were in existence. The said Provisional Allotment was to be
converted into an Agreements to sell which as per the Law. Where
the property is situated is required to be registered upon payments
being made by your client and since your client did not comply
with the terms or the Provisional Booking no such Agreement
came into being and the client of your client after 3 years of the
date when at least they admit to have become aware of the
cancellation is also barred by time.
4. You are requested to advise your client accordingly and to
refrain from any mis-conceived litigation. Upon cancellation of the
Provisional allotment no flat has been reserved for your client and
no such flat is in existence. The mis-conceived litigation if any
instituted by your client shall be defended by my Clients at the cost
and risk of your client.”

5.4. On 30.11.2005, a rejoinder was sent on behalf of the respondent

to the reply aforesaid, while returning the cheque and while objecting to

the conduct of the appellants, in the following words: -

“I would like to bring to your notice that your client wrote letter
dated 26.11.2001 in respect of flat No.(1) C-601 to my clientess
whereby accepted receipt of Rs.4,43,501/- out of total amount of
Rs.7,08,458/-, (2) C-602, receipt of Rs.4,46,912/- out of total
amount of Rs.7,17,114.40 and (3) C-603, receipt of Rs.4,44,625/-
out of total amount of Rs.7,32,147.50 and demanded balance
amounts of Rs.2,64,957/-, Rs.2,70,202.40 and Rs.2,87,522.50
respectively. Photocopies of the aforesaid letters are enclosed for
your kind perusal. Thus more than 60% of the total due amount
has been paid by my clientess. Since there was no progress in the
construction of the above said flats on part of your client, my
clientess had no option but to stop the further payment. The
cancellation of allotment without show cause notice to my
clientess and even non intimation of cancellation order is illegal
and thus amounts to illegal malafide intention on part of your

9
 client. However, my clientess is still ready to make balance
amount if the possession of the above said three flats are handed
over to my clientess.
It is wrong and denied that your client ever intimated the stage
of construction of the flats. My client had applied in the year 1989
and after 16 years she is being told that her allotment has been
cancelled.
My client has been cheated by your client with dishonest
intention and has misappropriated her hard money whereby
causing huge loss, mental agony to my clientess.
The above said cheque is enclosed herewith and you are
requested to acknowledge its receipt.
I, therefore, through this rejoinder call upon you to advise your
client to immediately hand over the physical possession of the
above said flats failing which my clientess shall be constrained to
initiate legal proceedings both civil and criminal before competent
court of law/forum and in that event your client shall be liable for its
cost, risk and consequences.”

5.5. After such exchange of communications, the respondent appears

to have filed a civil suit, which was dismissed for want of jurisdiction.

Thereafter, she preferred the said complaints in the District Forum. A

copy of one such complaint has been placed on record and the relief

claimed therein could be usefully reproduced as under: -

“Therefore, in the facts and circumstances of the case the

Complainant most respectfully prays that this Hon’ble state Forum
may kindly be pleased.

(1) To direct the respondent to give possession of the flat C-

601 to the complainant within one month;
(2) To direct the opposite Parties to pay a sum of Rs.
14,00,000/- (Fourteen lakh rupees only) as damages for
the loss of rent and mental agony and also direct the
respondent to pay interest on 4,43,500/- @ of 18% per
annum for 16 years i.e. Rs. 10,758,00/- i.e. total sum of
Rs. 24,758,00/-

10
 (3) To grant any other and further reliefs as may be deemed
fit and proper in the interest of justice.
(4) To award exemplary costs in favour of the Complainant
and against the respondent.”

5.6. The District Forum, while taking the three complaint cases

together, proceeded to reject the same while observing, inter alia, as

under:-

“7. Apart from it, the Complainant is also guilty of concealment of

the material fact from this Forum. OP has alleged that on the same
cause of action a case is pending before Civil Court at
Karkardooma Courts, Delhi and the Complainant has not denied
this fact. Moreover, complaint is also barred by limitation. The
Complainant is an NRI. She had invested her amount here in real
estate. The Complainant also filed two more complaints here
alongwith this complaint therefore as rightly objected by the OP
that all such activities of the Complainant were made with a view
to earn profit by investing her money in real estate. Thus,
Complainant tried to avail of the services of the OP for commercial
purpose. Whereas, the provisions of Consumer Protection Act,
1986 were made for the benefit of a Consumer. Thus,
Complainant does not fall within the category of consumer as
defined under section 2(d) of the Act. Therefore, taking the case of
the Complainant from any angle, we do not find any merit in her
case hence, we are constrained to dismiss the complaints. Copy
of this order be placed on all the files.”

The State Commission awarding compound interest

6. The State Commission, however, did not agree with the reasoning

of the District Forum and held that the complaints made by the

respondent were maintainable in law. As noticed, those questions relating

to maintainability are not involved in these appeals and hence, we need

not dilate on the same.

6.1. The relevant aspect of the matter is that after having overruled

preliminary objections of the present appellants, the State Commission

11
observed that 60% of the total sale consideration was paid by the

complainant-respondent; that possession of the flats booked by her was

not handed over even after expiry of the agreed period; that the

complainant, having opted for the construction-linked plan, was to make

payment of the balance amount on delivery of possession; and the

allegation of her being in default was to be rejected because, on

inspection of the site, construction was not found as per schedule. Having

said so, the State Commission proceeded to consider the question as to

how the complainant was to be compensated for the monetary loss, and

mental and physical harassment suffered at the hands of opposite parties

because of non-delivery of the allotted flats. The relevant observations of

the State Commission read as under: -

“19. In these circumstances all the preliminary objections of the

OPs/respondents, since not maintainable are sequentially
rejected. Coming to the merit of the case, it is a fact that booking
of three flats was done. This is also indisputed that 60% of the
total sale consideration was paid to OPs. Possession of the flats
so booked were not handed over although the agreed period was
over. The complainant having opted for the construction linked
plan had to pay the balance amount on the delivery of the
possession of the flats. But on inspection of the site the
construction in the project was not found as per schedule. Finally
the objection of the OP to the effect that the complainant was
defaulter in making the payment cannot sustain since the
complainant had opted for consideration linked plan and she had
to make the payment beyond 60% on completion of the
construction and thus this objection is also overruled. In these
circumstances the complaint deserves to be accepted. Accordingly
the orders passed by the District Forum dismissing the complaint
since not sustainable are set aside.
20. Having arrived at the said conclusion, the point for
consideration is as to how the Complainants are to be
compensated for the monetary loss, mental and physical

12
 harassment he has suffered at the hands of OPs on account of
non-delivery of the allotted flat.”

6.2. The State Commission, thereafter, examined various connotations

of the term “compensation” and observed that the Commission or the

Forum was entitled to award not only value of goods or services but also

to compensate a consumer for injustice suffered by him. With reference to

the decision in Ghaziabad Development Authority v. Balbir Singh:

(2004) 5 SCC 65, it was observed that this Court had indicated the factors

to be kept in view while determining adequate compensation; and in

cases where possession was directed to be delivered to the complainant,

the compensation for harassment would necessarily have to be less

because that party was being compensated by increase in the value of

the property but, in cases where only money was to be refunded, the

party would be suffering a loss inasmuch as he had deposited the money

in the hope of getting a flat/plot and he was deprived of the same, as also

the benefit of price escalation. The State Commission also observed that

in such case (only of refund of money), the complainant would suffer

substantial loss on account of payment of interest on the loans raised;

depreciation in the money value; and escalation in the cost of

construction etc. The State Commission also observed that in these

proceedings, necessary orders regarding refund of the deposited amount

could be passed, notwithstanding the proceedings in any other forum.

The relevant observations of the State Commission read as under: -

13
 “21. The provisions of the Act enable a consumer to claim and
empower the Commission/Forum to redress any injustice done to
a consumer. The Commission or the Forum is entitled to award
not only value of goods or services but also to compensate a
consumer for injustice suffered by him. The word compensation is
of very wide connotation. It may constitute actual loss or expected
loss and may extend the compensation for physical, mental or
even emotional suffering, insult or injury or loss. Therefore, for the
purpose of determining the amount of compensation, the
Commission/Forum must determine the extent of sufferance by
the consumer due to action or inaction on the part of the Opposite
Party. In Ghaziabad Development Authority Vs. Balbir Singh –
(2004) 5 SCC 65, while observing that the power and duty to
award compensation does not mean that irrespective of facts of
the case, compensation can be awarded in all matters on a
uniform basis, the Hon’ble Supreme Court gave certain instances
and indicated the factors, which could be kept in view while
determining adequate compensation. One of the illustrations given
in the said decision was between the cases, where possession of
a booked/allotted property was directed to be delivered and the
cases where only monies paid as sale consideration, are directed
to be refunded. The Hon’ble Court observed, in this behalf, that in
cases where possession is directed to be delivered to the
Complainant, the compensation for harassment will necessarily
have to be less because in a way that party is being compensated
by increase in the value of the property he is getting. But in cases
where monies are being simply refunded, then the party is
suffering a loss inasmuch as he had deposited the money in the
hope of getting a flat/plot. He is not only deprived of the flat/plot,
he has been deprived of the benefit of escalation of the price of
the flat/plot. Additionally, in my view, in such a situation, he also
suffers substantial monetary loss on account of payment of
interest on the loans raised; depreciation in the money value and
escalation in the cost of construction etc.
22. From the above it is apparent that this Commission can pass
orders regarding the refund of the amount deposited to the
company by the complainants, notwithstanding the proceedings
pending in any other forum.”

6.3. After the observations afore-stated, the State Commission took

note of a few decisions against the builders or the real estate developers

and on the rights of the allottee to decline possession at the belated

stage. Thereafter, the State Commission referred to the contentions

14
urged on behalf of the complainant on the point of compensation based

on the decision of COMPAT in the case of Dr. Manjeet Kaur Monga,

which was affirmed by this Court. In paragraph 29 of the judgement, the

State Commission presented its observations as also extractions from the

said decision of COMPAT in the following manner: -

“29. The ld. Counsel for the appellant while arguing on the point of
compensation has submitted that the case under consideration is
on the facts of Manjit Kaur Monga versus K.L. Suneja and ors
decided by the Hon’ble COMPAT and upheld by the Hon’ble
Supreme Court of India in the matter of Manjit Kaur (Supra)-(2018)
14 SCC 679 holding as under:-
“36…. It is clear that the respondents had made a false
representation to the general public including Smt.
Gursharan Kaur about the time within which the project was
to be completed i.e. three years but did not complete the
construction for more than one decade. Therefore, there is
no escape from the conclusion that they are guilty of unfair
trade practice as defined under Section 36-A(1)(i)(ii) and (ix)
of the Act.
37. The cancellation of allotment made in favour of the
complaint deserves to be declared as wholly arbitrary, illegal
and capricious. It is not in dispute that Smt. Gursharan Kaur
amount. The complainant, Dr. (Mrs.) Manjeet Kaur Monga
deposited three other instalments. She did not despite further
instalments because the respondents did not complete the
construction within the stipulated time. For the first time a
vague statement about the construction was made in letter
dated 26.12.2001, which was issued after 12 years of the
booking. Even thereafter the respondents did not disclose
the stage-wise progress in the construction work and, as
mentioned above, they deliberately misconstrued the
complaint’s protest dated 22.05.2002 as her disinclination to
take the flat. …..Therefore, it must be held that the
complainant was justified in not paying further instalments of
price and the respondent committed grave illegality by
cancelling the allotment.”
The quantum of compensation as has been decreed in the
aforementioned judgement of the Hon’ble COMPAT and also
upheld by the Hon’ble Supreme Court of India stipulates a
fair, just, equitable and reasonable award. The respondent
has unscrupulously deprived the appellant of the due benefit
of escalation in property prices since 1989 till date and

15
 therefore, in order to put the appellant in the same place and
deny the benefit of his own illegality to the respondent this
Hon’ble Court ought to compensate the appellant in terms of
the prevailing market value of the property in question.
In conclusion, the appellant seeks the return of the
instalments paid by her to the respondent plus compound
interest @ 15% p.a. from the date of actual refund, in
addition to damages quantified at Rs. 14,00,000/- for mental
agony and expenses incurred in protracted litigation.”

6.3.1. We are constrained to observe, in regard to the above-quoted part

of the judgment of the State Commission that in the said paragraph 29,

the State Commission purportedly extracted a few parts of paragraphs 36

and 37 of the decision of COMPAT in the case of Dr. Manjeet Kaur

Monga but then, placed two more passages as if being the part of

extractions, though the said two passages had obviously been the part of

submissions of the complainant where for the first time, the claim of

compound interest @ 15% p.a. occurred in this case. Although, such a

presentation in the judgment dated 12.03.2020 of the State Commission

(as appearing in the copy of judgment placed before us – pp. 166-167 of

the paper book) seems to be that of a typographical/clerical error but, we

have reproduced the same verbatim, for being relevant for the present

purpose.

6.4. After the observations foregoing, the State Commission found the

case of the present complainant akin to that of Dr. Manjeet Kaur Monga;

and when the units in question had already been sold, found it just and

proper to direct the present appellants to refund the deposited amount

together with compound interest @ 14% from the date of deposit. This,
16
according to the State Commission, was in line of the decision of this

Court in Malay Kumar Ganguly v. Sukumar Mukherjee (Dr.): [2009]

CPJ 17 (SC). The State Commission observed and directed as under: -

“30. In fact reliance of the judgement referred to in the preceding

paragraph against the same Ops, would be apt and best suited
since against the same builder and involving similar facts In the
facts and circumstances of the case, the possession of the unit
having already been sold, is not possible to be handed over
putting the complainant to a position where she had nothing to fall
back upon, the Ops/respondents are directed to refund relying on
the judgement in the matter of Manjit Kaur Monga versus K.L.
Suneja and ors (Supra) decided by the hon’ble Compat and
upheld by the Hon’ble Supreme Court of India, the deposited
amount plus compound interest at the rate of 14% from the date of
deposit. This would be in line with the principles set out by the
Hon’ble Supreme Court of India, in the matter of Malay Kumar
Gangully versus Sukumar Mukherjee (Dr.) as reported in III [2009]
CPJ 17 (SC) providing that a person is entitled to
damages/compensation as nearly as possible sum of money
which would have been if he had not sustained the wrong. This
would meet the ends of justice.
31. Ordered accordingly leaving the parties to bear the cost.
32. FA-122/2014 and FA-123/2014 being on the same lines
bearing the same facts and on the common point of law are also
disposed of accordingly with directions to the Ops as contained in
para 30 of this order.”

Approval by the National Commission

7. In the revision petitions preferred by the appellants against the

judgment and order dated 12.03.2020 so passed by the State

Commission, the National Commission, after rejecting other contentions

of the appellants, found that the facts of Dr. Manjeet Kaur Monga’s case

were almost identical in relation to the flats booked by the respondent in

the same project of the appellants. The National Commission took note of

the observations of this Court in Dr. Monga’s case and rejected the

17
contentions of the appellant in seeking to avoid the application of the said

decision, inter alia, in the following words: -

“32. From the bare reading of this provision, it is clear that the
proceedings continuing under MRTP Act before its repeal had
been saved under Section 66(1)(A). The argument of learned
counsel for the Opposite Party that the order of Dr. Manjeet Kaur
Monga’s case (supra) had been passed under a repealed Act and
therefore is not applicable in this case, has no force and that the
argument is totally misconceived and misdirected. Also, the order
in Dr. Monga’s case (supra) was passed in the year 2015 after the
repeal of MRTP Act which was challenged before the Hon’ble
Supreme Court and the Hon’ble Supreme Court passed its order
in 2018. Therefore, it is clear that the order of Dr. Manjeet Kaur
Monga’s case (supra) was pronounced after the repeal of the
MRTP Act and not during the existence of the MRTP Act.
33. There is no dispute that the facts of the Monga’s case (supra)
and the present case are identical as the flats were booked in the
same project of the Petitioner, although by different allottees and
that in both the cases, despite payment of the money, the allotted
flats were not given to its allottees within the stipulated period or
even thereafter. In the present case, the flats had been sold during
the pendency of the Complaint. The Opposite Party, therefore, is
not in a position to hand over the possession of the said flats to
the Complainant and the Commission is fully empowered to grant
any other relief which is just and proper in such circumstances. It
is also settled proposition of law that the Commissions are bound
to follow the dictum of the superior Foras on the identical facts. In
the present case, on the identical facts there is a judgment of
Hon’ble Supreme Court, although the remedy had been sought in
that case under a different provision of the Act, however, the
findings are on the identical facts of the case and so the order is
binding on the Foras below….”

7.1. After reproducing certain passages from the decision of this Court

in Dr. Manjeet Kaur Monga (supra), the National Commission concluded

on the matter by dismissing the revision petitions in the following terms: -

“34. It is also apparent that the Complainant has specifically

argued before the State Commission and also mentioned this fact
in her written submissions that they should be awarded the same
relief as had been granted in Dr. Monga’s case (supra) and that

18
 this contention was not opposed by the Opposite Party before the
State Commission.
35. This Commission has a limited revisional jurisdiction. It can
set aside the impugned order in exercise of its revisional
jurisdiction only when the findings are perverse or without
jurisdiction.
36. From above discussion it is clear that in this case, the State
Commission had duly followed the dictum of the Hon’ble Supreme
Court in Dr. Manjeet Kaur Monga’s case (supra) and therefore, it
cannot be said that the findings of the State Commission are
perverse or without jurisdiction. We found no illegality or infirmity in
the impugned order. The present Revision Petitions have no merit
and the same are dismissed.”

Rival Contentions

8. While assailing the orders aforesaid, awarding compound interest

to the respondent, learned senior counsel Mr. Ranjit Kumar appearing on

behalf of the appellants has put forward six-fold submissions which could

be summarised as follows:

8.1. Learned senior counsel has contended in the first place that the

Act of 1986 does not confer any power on the Consumer Fora

established thereunder to award compound interest on the compensation

amount; and for being not envisaged under or by the scheme of the Act of

1986 and being not provided in the contract either, such awarding of

compound interest cannot be countenanced. Learned senior counsel has

submitted that wherever the legislature intended to confer the power to

grant compound interest, an enabling provision has been incorporated in

the statute. In this regard, the learned counsel has given several

examples, like Section 16 of the Micro, Small and Medium Enterprises

19
Development Act, 2006; Section 5 of the Interest on Delayed Payments to

Small Scale and Ancillary Industrial Undertakings Act, 1993; Section 23 of

the Trusts Act, 1882; Section 8 of the Payment of Gratuity Act, 1972;

Section 7 of the Public Premises (Eviction of Unauthorised Occupants)

Amendment Act, 2015; and Section 3 of the Usurious Loans Act, 1918.

Learned counsel has cited the decision of this Court in the case of

Central Bank of India v. Ravindra: (2002) 1 SCC 367 in support of the

submissions that with the contract not providing so, compound interest

could not have been awarded. It has also been contended that in the

absence of any agreement or any statutory provision or mercantile usage,

interest payable could only be at the market rate and could never be

compounded at whopping 14%. Learned counsel has also relied upon the

decision in Clariant International Ltd. and Anr. v. Securities &

Exchange Board of India: (2004) 8 SCC 524.

8.2. In the second limb of submissions, learned senior counsel for the

appellants has contended that in the recent decisions, this Court has only

awarded simple interest with the rates ranging from 6% to 9% p.a. in the

cases of deficiency of service by the builders. In this regard, learned

counsel has referred to the rate of interest awarded in Experion

Developers Pvt. Ltd. v. Sushma Ashok Shiroor: (2022) SCC OnLine

SC 416; NBCC (India) Ltd. v. Shri Ram Trivedi: (2021) 5 SCC 273; Ireo

Grace Realtech Pvt. Ltd. v. Abhishek Khanna and Ors.: (2021) 3 SCC

20
241; DLF Home Developers Limited and Anr. v. Capital Greens Flat

Buyers Association and Ors.: (2021) 5 SCC 537; Arifur Rahman Khan

and Ors v. DLF Southern Homes Pvt Ltd and Ors.: (2020) 16 SCC 512

and DLF Home Panchkula Pvt Ltd and Ors. v. DS Dhanda and Ors.:

(2020) 16 SCC 318. The learned counsel has particularly referred to the

passage in the case of Ireo Grace Realtech (supra) wherein, the prayer

for compound interest @ 20% was rejected, for having no nexus with the

commercial realities of the prevailing market. Learned counsel would

submit that in the face of such decisions, taking even the highest interest

rate at 9% p.a., the total amount with interest payable to the respondent

on 09.05.2022 (the date of issuance of notice by this Court) would be Rs.

49,87,129/- whereas the respondent has already withdrawn a sum of Rs.

2,55,95,119/-, which was deposited by the appellants pursuant to the

directions of the National Commission and then by this Court, alongwith

accrued interest. It has been submitted that the amount so received by

the respondent would be approximately equal to the principal amount

together with simple interest @ over 60% p.a., calculated from the year

1989 to the month of June, 2022.

8.3. Learned senior counsel has contended in the third limb of

submissions that the directions as issued in the present matter would

result in unjust enrichment of the respondent inasmuch as the present

value of the award would be around Rs. 7.35 crore and that would be

21
approximately 4.5 times the cost of all the three flats taken together today

as per the current market rate. Pertinently, the learned senior counsel

would submit, the respondent had, until the time of cancellation, paid only

a sum of Rs. 13.35 lakhs for all the three flats which was only 25% of the

final price that would have been payable at the time of taking possession.

In this regard, it has also been argued that even with reference to the

decision in Ghaziabad Development Authority (supra), the

compensation to be awarded to the respondent cannot exceed the fair

market value of the flats and as per the circle rates, it would be around

Rs. 2.04 crore and even as per the precedents of sale transactions, the

amount could at the most be Rs. 2.25 crore as per the average sale price

based on 10 sale precedents in the same building and for the flats of

similar size. In any case, the amount of compensation on the basis of

present market realities would be much lower as compared to the

compensation quantified on the basis of compound interest @ 14%.

8.4. In the fourth limb of submissions, learned senior counsel for the

appellants has argued that in the present case, the respondent had

neither demanded nor prayed for the relief of compound interest in the

complaints filed before the District Forum; and with reference to the

decision of this Court in the case of Manohar Lal (D) by Lrs. v. Ugrasen

(D) by Lrs. and Ors.: (2010) 11 SCC 557, it has been contended that the

Consumer Fora could not have granted relief which had not been

22
specifically prayed for. Further to this, learned counsel has also

contended that in the present case, there had not been any finding by the

State Commission or the National Commission as regards the alleged

loss or injury suffered by the respondent. Although, the respondent

pleaded loss of rent but no evidence was brought on the record on this

issue nor had it been the case of the respondent that she was staying in a

rented accommodation or that she had availed loan for purchasing the

flats and was making payment of instalments to the lender. It has, thus,

been argued that without any pleading, without any evidence, and without

any finding on any loss or injury, the State Commission proceeded to

direct the refund of deposited amount with compound interest @ 14%,

which remains wholly unjustified.

8.5. Fifthly, learned senior counsel for the appellants has referred to

the decision of this Court in the case of Dr. Manjeet Kaur Monga (supra)

in detail and has contended that therein, the only argument before this

Court was as to whether the Tribunal under MRTP Act was required to

determine the specific amount towards compensation as envisaged by

Section 12-B thereof and the observations in paragraph 5 of the decision,

this Court did not interfere with the award of compound interest in that

context. The learned counsel has referred to a 3-Judge Bench decision of

this Court in the case of Sanjay Singh and Anr. v. U.P. Public Service

Commission, Allahabad and Anr.: (2007) 3 SCC 720 to submit that it is

23
the ratio decidendi of a judgment and not the final order therein which

form a precedent and, therefore, Dr. Monga’s case cannot be considered

to be a binding precedent so far as the proposition with respect to

compound interest is concerned.

8.6. In the sixth fold of submissions, essentially being in the

alternative, the learned senior counsel has submitted that even in Dr.

Manjeet Kaur Monga’s case (supra), this Court upheld the directions for

refund with compound interest only until the date of refund post-

cancellation, which came to Rs.31,87,131/- and which, at the relevant

time, was also the approximate market value of the said flat. In this

regard, learned counsel for the appellants has also referred to the

subsequent decision in Dr. Manjeet Kaur Monga’s case by this Court in

K.L. Suneja and Anr. v. Dr. (Mrs.) Manjeet Kaur Monga (D) Through

Her LRs and Anr: 2023 SCC OnLine SC 91. It has, thus, been

contended that the impugned orders, which direct a refund of the principal

amount together with compound interest @ 14% without even specifying

the period for which it would be payable, are required to be interfered with

by this Court. While elaborating on this line of submissions, learned

counsel has submitted that in the present case, the appellants had

refunded the entire amount (after deducting the earnest money deposited

by the respondent) through the cheque dated 07.11.2005 for an amount

of Rs. 10,68,031/- and hence, assuming without admitting the liability

24
towards compound interest at the rate awarded by the State Commission,

the total amount payable until 08.11.2005 would be Rs. 84,76,540/- and

not beyond. Learned counsel would submit that awarding of compound

interest without taking note of the facts of refund cheque issued by the

appellants remains wholly unjustified.

9. On the other hand, learned senior counsel for the complainant-

respondent Mr. Sidharth Luthra has duly supported the proposition of

awarding compound interest in this case and has strenuously countered

the submissions made on behalf of the appellants.

9.1. With reference to the background aspects, learned senior counsel

has submitted that the respondent purchased 3 flats from the appellants

in the year 1989 when she was 39 years of age in anticipation of moving

to India and staying together with her daughters; and the appellants

promised to complete the construction and deliver the flats within 36

months i.e., by the year 1992 and thus induced the respondent to pay

60% of the consideration amount in a construction-linked payment plan

by 1994. However, fact of the matter had been that there was no

construction on the ground until about the years 2003-2005 and,

thereafter, the appellants fraudulently sold the same flats to a third party

without even intimating the alleged cancellation to the respondent.

Learned counsel would submit that the appellants have failed to bring on

record any cancellation letter pertaining to the said 3 flats and on the

25
contrary, they have made inconsistent statements about the date of

cancellation while sometimes alleging that cancellation was in the year

2002 whereas stating before the National Commission that the

cancellation was on 25.04.2005. Thus, it has been contended that the

appellants had neither been fair in their dealings nor consistent in their

stand.

9.2. While placing strong reliance on the decision of this Court in Dr.

Manjit Kaur Monga (supra), learned senior counsel has submitted that

the said case relating to the same project and the same builder (the

appellants) makes it clear that the appellants had duped the respective

complainants by employing almost the same modus operandi. Learned

counsel would submit that as regards claim for compensation, the

respondent’s case stands on a better footing than the case of Dr. Monga

inasmuch as in the said case, the appellants had cancelled the allotment

by a letter dated 30.04.2005 whereas no such cancellation letter is on

record in the present case and in fact, the appellants stated about the

alleged cancellation only in their reply dated 08.11.2005 to the notice

served by the respondent on 15.10.2005. This is coupled with the fact

that the respondent had made payments of Rs. 30,000/-, Rs. 45,000/-

and Rs. 75,000/-, respectively on 09.02.2002, 20.02.2002 and

25.01.2004, which shows that she was keenly interested in purchasing

the flats for her private use.

26
9.2.1. Learned counsel has further submitted that while both, the

respondent and the said Dr. Manjit Kaur Monga, were duped by the

appellants and resultantly both sought possession of their respective flats,

the respondent invoked jurisdiction under the Act of 1986 whereas the

said complainant approached COMPAT under the MRTP Act. Both the

fora had concurrent jurisdiction as regards unfair trade practice, though

the respondent also complained of deficiency of service. Learned counsel

has referred to the provisions contained in Section 12-B(3) of the MRTP

Act and Section 14(1)(d) of the Act of 1986 and has submitted that the

provisions are in essence identical, empowering the respective fora to

award compensation though, the power to award compensation under the

Act of 1986 is wider in scope.

9.2.2. Learned senior counsel has further submitted that in Dr.

Monga’s case, this Court has affirmed the measure of compensation for

an identically placed complainant by refund of deposit together with 15%

p.a. compound interest from the date of deposit till the date of return.

Learned counsel has recounted the factors constituting rationale in

awarding such compound interest in Dr. Manjit Kaur Monga’s case,

including those of extraordinarily long harassment; deprivation of flat;

inordinate delay of construction; illegal retention of deposit; and then,

compulsion to pursue protracted litigation. Learned counsel would submit

that the respondent had been subjected to rather excessive harassment

27
for about 34 years and presently at the age of 73 years, she is required to

pursue this litigation. Further, in Dr. Manjit Kaur Monga’s case, the

deposits were retained by the appellants for about 12 to 15 years

whereas in the case of the respondent, the deposits were illegally

retained and utilized by the appellants for 29 to 34 years. Thus, according

to the learned counsel, the award of compound interest to the respondent

does not call for any interference.

9.3. Learned senior counsel has further cited the decision in

Wallersteiner v. Moir (No. 2): (1975) Q.B. 373 to highlight the principles

therein that compound interest (i.e. interest with yearly rests in case no

other frequency of rests is specified) should be awarded under the

equitable jurisdiction of the Court where the wrongdoer utilizes the money

retained for business purpose and thereby making the profit thereon.

Equally, it should be presumed that the wronged person would have

made the most beneficial use of the money, had it not been deprived of it.

It was further held that the ‘justification for charging compound interest

normally lies in the fact that profits earned in trade would likely be used

as working capital for earning further profits’ and that the ‘application of

this rule is not confined to cases in which a trustee or agent has

misapplied trust funds or a principal’s property, nor is it confined to

trustees and agents.’

28
9.3.1. In regard to the principles surrounding and governing the

award of compound interest, learned senior counsel has also made

elaborate reference to the decision of this Court in the case of Indian

Council for Enviro-Legal Action v. Union of India and Ors.: (2011) 8

SCC 161.

9.4. Learned senior counsel has further contended that the

argument on behalf of the appellants that the compound interest could

only be awarded if provided for in the statute remains baseless inasmuch

as the Act of 1986 provides for an award for compensating the consumer

for any loss or injury including punitive damages; and there are no fetters

on the way in which such an award may be expressed. According to the

learned counsel, this view has been affirmed by this Court in Dr. Monga’s

case, wherein an award expressed in terms of compound interest has

been held to be falling within the definition of “compensation.” Secondly,

this Court has held that ‘the inherent powers in the Court and principles

of justice and equity are sufficient to enable an order directing payment of

compound interest; rather, the power to order compound interest as part

of restitution cannot be disputed, otherwise there could never be

restitution.’

9.5. Learned senior counsel for the respondent has further contended

that reliance on behalf of the appellants on certain decisions of this Court

awarding simple interest was wholly misplaced for the noteworthy

29
distinction in the facts of all such cases and the present case that such

cases dealt with delayed possession of flats by the builder as opposed to

denial of possession altogether. Learned counsel has underscored the

submission that in case compensation is awarded in addition to the

possession of the property itself, the consumer is not deprived of the

escalation in property prices and thus, an award in terms of simple

interest may be suitable, on the given set of facts. Secondly, none of the

cases cited by the appellants deal with an exceptionally long period of

illegal retention of consideration by the builder i.e., 29-34 years. It is

undeniable that the property prices escalate exponentially over such long

period of over three decades and thus , any award must correlate to the

economic realities of real-estate price escalation, as well as the

enormous unjust enrichment of the builder.

9.6. Learned counsel has submitted that in the present case, the

appellants have illegally retained and utilized the payments made by the

respondents for a period of 29-34 years and made huge profits

thereupon in real-estate projects. In the event the appellants availed such

amounts for its business purpose from a bank, even at the most

conservative rates [15.95% p.a. compound interest], they would have to

repay a sum of Rs. 17.52 crore. Thus, the appellants at least made this

profit by utilizing the payments made by the respondent leading to unjust

enrichment. It is submitted that during the period 1989-1994 when the

30
appellants collected funds from the respondent, lending rates were

historically at an all-time high (about 20% p.a. in 1991) and therefore, the

modus operandi of the appellants in collecting ‘free capital’ from innocent

home buyers without any intent of delivering on their promise, deserves

to be disapproved with award of penal damages.

9.6.1. Learned senior counsel has further submitted that the

respondent has made investment in real-estate and not in any other

sector; and most conservative measure of escalation of real estate prices

is provided by comparing circle rates determined by the Government

authorities. In 1989, the circle rate for real estate in Sector 4, Vaishali,

Ghaziabad was Rs. 850/sq. mtr. whereas, since 2016, this circle rate

escalated to Rs. 74,200/sq. mtr. Thus, property prices in Sector 4,

Vaishali, Ghaziabad have risen exponentially since 1989, at least by a

multiple of 87.3 times. According to learned counsel, another way of

mathematically expressing the same escalation in property prices, other

than by way of a multiple, is by way of computing a rate of compounding

and as such, it is equivalent to say that property prices in the area in

question have escalated at a compound rate of 15% p.a. from 1989 for the

next 32 years.

9.6.2. Learned senior counsel has further argued that the contention on

the part of the appellants with reference to simple rate of interest and

disputing the reliance on circle rate is also misleading for the reason that

31
in the year 1989, no circle rates of flats were available. Thus, the

respondent has used the then circle rate for land and the present circle

rate for land for the purpose of drawing an “apples-to-apples”

comparison. To arrive at a more accurate present value of the 3 flats, the

respondent has bifurcated the admitted purchase price in 1989 into land

and building components, in terms of the allotment letter and thereafter,

the building component is escalated in terms of the CPWD cost index and

the land component is escalated in terms of the increase in circle rate for

land. Thus, according to the learned counsel, the present value of 3 flats

has rightly been arrived at Rs. 9.06 crore.

9.6.3. In regard to such value indicators, it has also been submitted

on behalf of the respondent that undervaluing of transaction was that of

common knowledge and this apart, value of the project has depreciated

over the decades due to factors such as deterioration of the property

upon usage, depression in rates due to multiple litigations etc. Thus, the

respondent has rightly placed on record the present cost of alternative 3

flats at about Rs 6.48 crore and has computed the loss of rent for 31

years at Rs 1.94 crore. Viewed from any angle, according to learned

senior counsel, the amount receivable under the orders impugned

remains the minimum towards entitlement of the respondent.

9.7. As regards the alternative submission of limiting the award of

compound interest until the year 2005 in terms of Dr. Monga’s case, the

32
learned senior counsel has submitted that the said proposition remains

inapplicable to the present case for the reason that initial refund of money

in Dr. Monga’s case was by way of a pay order and thus, the appellants

did not utilize or retain the money after 30.04.2005 whereas in the

present case, they merely attempted to send a cheque with the reply

dated 08.11.2005 which was never encashed and was promptly returned

by the respondent with rejoinder dated 30.11.2005 and such returned

cheque was duly accepted by the appellants. In regard to the later

decision in the case of K.L. Suneja v. Dr. (Mrs.) Manjeet Kaur Monga

(supra), it has also been submitted that the appellants rather conceded

before this Court that in case money was lying in their account, they

would be liable to pay compound interest @ 15% p.a. until the money

was paid by them. It has been submitted that, in the present case, money

was debited from the appellants’ account for the first time only on

25.11.2020 when they deposited 25% of the award amount pursuant to

the direction of the National Commission. Even if they have made further

payment according to the order of this Court to the tune of Rs. 1 crore,

compound interest must run on the remainder of the portion of the award

amount, which the appellants have continued to retain and enjoy.

9.8. It has, therefore, been contended that the facts of the present

case are more egregious than the facts of the Dr. Monga’s case and in

the overall circumstances, it would be appropriate and just to determine

33
the compensation in keeping with the formula for measure of such

compensation adopted in Dr. Monga’s case in order to avoid unequal

treatment to the respondent. It has also been submitted that in fact the

appellants did not argue against the award of compound interest before

the State Commission and thus, their challenge ought not be considered

under Article 136 of the Constitution of India, for such an argument

having been consciously given up by them. The decision of this Court in

the case of Transmission Corp. of AP Ltd. v. P. Surya Bhagavan:

(2003) 6 SCC 353 has been referred to in this regard. It has also been

argued in reference to the decision in Balram Prasad v. Kunal Saha:

(2014) 1 SCC 384 that while awarding just compensation, merely the

form of claim made by the complainant may not be considered decisive.

10. In rejoinder submissions, the learned senior counsel for the

appellants has contended that the decision in Dr. Manjeet Kaur Monga

cannot be read as an authority for the proposition that compound interest

is invariably to be granted in all these cases. Learned counsel has also

submitted that the decision in the case of Indian Council for Enviro-

Legal Action (supra) is also not applicable as the compound interest

therein was awarded on the unique facts of that case and where the

mandate of this Court was circumvented for more than a decade. Learned

counsel has also submitted that the judicial precedents of English Courts

cannot be applied to the present case, in view of specific law in India that

34
compound interest would be operated only if the statute or the contract

provides for the same; and there being no such prescription in the statute

or in the contract, awarding of compound interest cannot be said to be

justified.

11. We have given our anxious consideration to the rival submissions

and have examined the record with reference to the law applicable.

Matters of form and pleading not relevant in the present case

12. As noticed, in these appeals, a wide variety of rival submissions

have been presented before us on the question as to whether the

Consumer Fora had been justified in awarding and approving compound

interest at the rate of 14%. While dealing with these submissions, we may

observe at the outset that, in our view, neither the submissions on behalf

of the appellants about want of pleading and prayer for compound interest

nor the submissions on behalf of the respondent, about want of

opposition before the State Commission by the present appellants,

deserve much dilation. In this regard, it may be observed that in the

complaint case as originally filed, the respondent did not make any prayer

for award of compound interest; rather her prayer had essentially been for

directions to the appellants to deliver the flats and to award damages. If at

all, the respondent claimed simple interest @ 18% p.a. It appears that

such a submission seeking compound interest was properly made, with

reference to the decision in Dr. Manjeet Kaur Monga’s case (supra), for

35
the first time by the claimant-respondent only before the State

Commission. As noticed hereinbefore, the State Commission, while

reproducing two passages from the decision of COMPAT, further

reproduced a part of written submissions of the claimant-respondent

claiming compound interest. The State Commission did not elaborate

much on the principles governing its powers and those governing

awarding compound interest; and rather considered the decision in Dr.

Monga’s case to be decisive of the matter. In the revision petitions before

the National Commission, the appellants seriously contested the

applicability of the decision in Dr. Monga’s case to the facts of the

present case, albeit on a different ground that the decision rendered in

the proceedings under MRTP Act cannot be applied to the present

proceedings under the Act of 1986.

12.1. We shall be dealing with the relevant aspects concerning

applicability of Dr. Monga’s case a little later but suffice it would be to

observe that in the given set of circumstances, the respondent does not

appear justified in suggesting that the appellants had consciously given

up their contest to the claim of compound interest. The other side of the

matter is that looking to the prayers in the complaints, the complainant-

respondent could not have been denied the proper relief, if available on

the facts of the case and permissible on the applicable legal principles.

Thus, the contentions as regards the matter of form and pleading are left

36
at that and without further discussion on the decision cited on behalf of

the appellant in the case of Manohar Lal (supra) as also the decisions

cited on behalf to the respondent in the cases of Transmission Corp. of

AP Ltd. and Balram Prasad (supra).

The cited decisions on award of interest in real estate dealings

13. Reverting to the rival submissions concerning the question as to

whether the Consumer Fora had been justified in awarding and approving

compound interest at the rate of 14% and a vast variety of alternative

methods for computing damages with reference to the loss said to have

been suffered by the respondent and the punitive measures against the

appellants, as noticed, strong reliance has been placed by the State

Commission and the National Commission as also by the respondent on

the decision in Dr. Manjeet Kaur Monga (supra), which arose out of the

case for compensation under the provisions of MRTP Act. The main

plank, rather substratum, of the decision of State Commission in awarding

compound interest had been the view taken and relief granted against the

appellants in relation to the very same project and in relation to a similar

grievance of the said other prospective buyer, Dr. Monga, who was also

deprived of the fruits of her deposits.

14. However, before adverting to the decision in the case of Dr.

Manjeet Kaur Monga (supra) in necessary details, we may usefully refer

to the other decisions cited on behalf of the appellants in support of the

37
contention that usually in such matters against the builders, this Court has

awarded simple interest in the range of 6% to 9% p.a., which has been

countered on behalf of the respondent that the said decisions more or

less related to the cases of delayed delivery of possession and not

deprivation of flat altogether and retention of money for over three

decades.

14.1. In the case of DLF Homes Panchkula Pvt Ltd (supra), the facts-

sheet indicates the features of delay in delivery of possession and grant

of compensation for such delay by way of interest as also a lump sum

and therein, this Court observed that there cannot be multiple heads to

grant damages and interest when the parties had agreed to payment of

damages in a particular manner. In the given context, this Court, inter

alia, observed as under:

“15. The District Forum under the Consumer Protection Act, 1986
(“the 1986 Act”) is empowered inter alia to order the opposite party
to pay such amount as may be awarded as compensation to the
consumer for any loss or injury suffered by the consumer due to
the negligence of the opposite party including to grant punitive
damages. But the forums under the Act cannot award interest
and/or compensation by applying rule of thumb. The order to grant
interest at the maximum of rate of interest charged by nationalised
bank for advancing home loan is arbitrary and has no nexus with
the default committed. The appellant has agreed to deliver
constructed flats. For delay in handing over possession, the
consumer is entitled to the consequences agreed at the time of
executing buyer's agreement. There cannot be multiple heads to
grant of damages and interest when the parties have agreed for
payment of damages @ Rs 10 per square foot per month. Once
the parties agreed for a particular consequence of delay in
handing over of possession then, there have to be exceptional and
strong reasons for SCDRC/NCDRC to award compensation at more
than the agreed rate.

38
 16. Though the 1986 Act empowers the authorities to award
compensation for any loss or injury including building damages but
the order of NCDRC or that of SCDRC of awarding compensation is
without any foundation being laid down by the complainant on
judicially recognised principles and is by rule of thumb. Therefore,
we find that grant of compensation under various heads granted
by NCDRC cannot be sustained.”

14.2. The case of Wing Commander Arifur Rahman Khan (supra)

had been another one of delay in delivery of possession wherein this

Court enunciated principles for awarding of compensation for such delay.

In that context, this Court held that compensation in excess of stipulated

amount in the agreement was allowable when the stipulated

compensation was unreasonable and unfair. Therein, this Court

ultimately allowed simple interest @ 6% p.a. with the following

observations and directions:

“69. For the above reasons we have come to the conclusion that
the dismissal of the complaint by NCDRC was erroneous. The flat
buyers are entitled to compensation for delayed handing over of
possession and for the failure of the developer to fulfil the
representations made to flat buyers in regard to the provision of
amenities. The reasoning of NCDRC on these facets suffers from a
clear perversity and patent errors of law which have been noticed
in the earlier part of this judgment. Allowing the appeals in part, we
set aside the impugned judgment and order of NCDRC dated 2-7-
2019 [Rasheed Ahmad Usmani v. DLF Ltd., 2019 SCC OnLine
NCDRC 84] dismissing the consumer complaint. While doing so, we
issue the following directions:
69.1. Save and except for eleven appellants who entered into
specific settlements with the developer and three appellants who
have sold their right, title and interest under the ABA, the first and
second respondents shall, as a measure of compensation, pay an
amount calculated @ 6 per cent simple interest per annum to each
of the appellants. The amount shall be computed on the total
amounts paid towards the purchase of the respective flats with
effect from the date of expiry of thirty-six months from the

39
 execution of the respective ABAs until the date of the offer of
possession after the receipt of the occupation certificate.”

14.3. The case of DLF Homes Developers Ltd. (supra), dealt with by a

3-Judge Bench of this Court, had also been of delay in delivery of

possession and therein, this Court held that compensation for such delay

over and above contractual rate was allowable even when the seller had

given the option to the buyer to exit with interest. In that context, this

Court held that such exit option would not disentitle the flat purchaser

from claiming compensation. This Court observed, inter alia, as under: -

“8….The fact that the developer offered an exit option with interest
at 9% would not disentitle the flat purchasers from claiming
compensation. For a genuine flat buyer, who has booked an
apartment in the project not as an investor or financier, but for the
purpose of purchasing a family home, a mere offer of refund would
not detract from the entitlement to claim compensation. A genuine
flat buyer wants a roof over the head. The developer cannot assert
that a buyer who continues to remain committed to the agreement
for purchase of the flat must forsake recourse to a claim for
compensation occasioned by the delay of the developer. Mere
refund of consideration together with interest would not provide a
just recompense to a genuine flat buyer, who desires possession
and remains committed to the project. It was for each buyer to
either accept the offer of the developer or to continue with the
agreement for purchase of the flat.
9. Similar is the position in regard to the submission on the
appreciation of the value of the flats. Undoubtedly, this is one
factor which has to be borne in mind in considering whether and, if
so to what extent, compensation for delay should be awarded.
Having regard to the principles which have been enunciated in the
earlier two decisions [Arifur Rahman Khan v. DLF Southern
Homes (P) Ltd., (2020) 16 SCC 512] , [Pioneer Urban Land &
Infrastructure Ltd. v. Govindan Raghavan, (2019) 5 SCC 725 :
(2019) 3 SCC (Civ) 37] which have been noted above, we are
unable to subscribe to the submission that the flat buyers are not
entitled to any payment whatsoever on account of delayed
compensation.”

40
14.3.1. In the said case, this Court reduced the compensation on account

of delay in handing over possession from 7% p.a. as awarded by the

National Commission to 6% p.a. in light of the decision in Wing

Commander Arifur Rahman Khan (supra).

14.4. In the case of Ireo Grace Realtech (supra), another 3-Judge

Bench of this Court dealt with different categories of cases, some relating

to delay in offering possession and some relating to such allottees who

had been offered alternative units. This Court found such other allottees

who had not been offered possession of the units allotted to them to be

entitled to refund of the amount deposited by them but their claim for

award of compound interest was declined for having no nexus with the

commercial realities of the prevailing market. The consideration of this

Court in relation to such class of allottees with the relevant observations

could be usefully reproduced as under:

“47. Insofar as the allottees in Chart B are concerned, they have

paid part consideration, in most cases up to the 4th instalment till
2017, when they found that there was no progress being made in
respect of the Towers in which the apartments had been allotted to
them. It is an admitted position that occupation certificate for
Towers A1, A2, A3, B7, C9 and C11, in which the allotments have
been made for this category has not been issued by the Municipal
Corporation. The apartments have not been ready for allotment
even as on 30-6-2020, as per the date fixed before RERA
Authority.
48. The allottees submitted that they were facing great hardship
since they had obtained loans from banks for purchasing these
apartments, and were paying high rates of interest. In 2017, when
they realised that there was no construction activity in progress,
they were constrained to file consumer complaints before the

41
National Commission, and then discontinued payment of further
instalments.
49. The developer made an alternate offer of allotment of
apartments in Phase 1 of the project. The allottees are however
not bound to accept the same because of the inordinate delay in
completing the construction of the Towers where units were
allotted to them. The occupation certificate is not available even as
on date, which clearly amounts to deficiency of service. The
allottees cannot be made to wait indefinitely for possession of the
apartments allotted to them, nor can they be bound to take the
apartments in Phase 1 of the project. The allottees have submitted
that they have taken loans, and are paying high rates of interest to
the tune of 7.9%, etc. to the banks. Consequently, we hold that the
allottees in Chart B are entitled to refund of the entire amount
deposited by them.
50. Insofar as award of compensation by payment of interest is
concerned, Clause 13.4 of the apartment buyer's Agreement
provides that the developer shall be liable to pay the allottee
compensation calculated @ Rs 7.5 per square foot of the super
area for every month of delay, after the end of the grace period.
The compensation will be payable only for a period of 12 months.
The apartment buyers in their complaint filed before the National
Commission made a prayer for refund of the amount deposited
along with interest @ 20% p.a. compounding quarterly till its
realisation. The apartment buyers, in their submissions have
stated that they have obtained home loans on which interest @
7.90% p.a. is being paid, even as on date.
51. We have considered the rival submissions made by both the
parties. The delay compensation specified in the apartment
buyer's Agreement of Rs 7.5 per square foot which translates to
0.9% to 1% p.a. on the amount deposited by the apartment buyer
cannot be accepted as being adequate compensation for the delay
in the construction of the project. At the same time, we cannot
accept the claim of the apartment buyers for payment of
compound interest @ 20% p.a., which has no nexus with the
commercial realities of the prevailing market. We have also taken
into consideration that in IREO Grace Realtech (P) Ltd. v. Subodh
Pawar [IREO Grace Realtech (P) Ltd. v. Subodh Pawar, 2019
SCC OnLine SC 1937], this Court recorded the statement of the
counsel for the developer that the amount would be refunded with
interest @ 10% p.a. A similar order was passed in IREO Grace
Realtech (P) Ltd. v. Surendra Arora [IREO Grace Realtech (P)
Ltd. v. Surendra Arora, 2019 SCC OnLine SC 1943]. However, the
order in these cases were passed prior to the outbreak of the
pandemic.

42
 52. We are cognizant of the prevailing market conditions as a
result of Covid-19 Pandemic, which have greatly impacted the
construction industry. In these circumstances, it is necessary to
balance the competing interest of both parties. We think it would
be in the interests of justice and fairplay that the amounts
deposited by the apartment buyers is refunded with interest @ 9%
SI p.a. from 27-11-2018 till the date of payment of the entire
amount. The refund will be paid within a period of three months
from the date of this judgment. If there is any further delay, the
developer will be liable to pay default interest @ 12% SI p.a.
53. The developer shall not deduct the earnest money of 20%
from the principal amount, or any other amount as mentioned in
Clause 21.3 of the Agreement, on account of the various defaults
committed by the developer, including the delay of over 7 months
in obtaining the fire NOC.”

14.5. The case of NBCC (India) Ltd. (supra) was directly a case of

delayed delivery of possession and therein, this Court awarded simple

interest @ 7% p.a. for the default period and did not approve of awarding

any additional amount towards compensation. This Court, inter alia, said

as under: -

“13. As regards, the date on which interest would become

payable, having regard to the one-year period which is stipulated,
beyond two and a half years from the original period under Clause
20, interest would become payable from 1-1-2016. Secondly,
insofar as the rate of interest is concerned, the interest should be
fixed at 7% p.a. instead and in place of 10% which has been
awarded by NCDRC. Interest @ 10% is excessive, in light of
prevailing market conditions. [Central Bank of India v. Ravindra,
(2002) 1 SCC 367, SCC para 39.]
14. NCDRC has, in addition to the award of interest, granted
compensation of Rs 2,00,000 for loss of rent.
Once NCDRC awarded interest for the delayed handing over of
possession, there would be no justification to award an additional
amount of Rs 2,00,000.”

14.6. In the case of Experion Developers Pvt. Ltd. (supra), another 3-

Judge Bench of this Court dealt with a case where the developer did not

offer possession within the period stipulated in the agreement and the
43
complainant sought refund of the total consideration of Rs. 2,06,41,379/-

with interest at the rate of 24% p.a. The reasons given by the developer

for delay in handing over the possession was non-availability of

occupation certificate and it was pointed out that after securing

occupation certificate on 23.07.2018, notice of possession was issued to

the consumers on 24.07.2018. It was, therefore, claimed that possession

could be handed over and the complaint ought to be dismissed. The

National Commission allowed the complaint and directed the developer to

refund the deposited amount with interest @ 9% p.a. In the given context,

this Court examined the other decisions of this Court as also the

contentions concerning the provisions of the Real Estate (Regulation and

Development Act), 2016 and held that the Commission has the power

and jurisdiction to direct return of money under Section 14 of the Act of

1986 if the consumer so chooses. The order of the National Commission

was approved by this Court with the following observations: -

“28. The Consumer in present case prayed for the solitary relief
for return of the amount paid towards purchase of the apartment
without a prayer for alternate relief. Recognizing the right of the
Consumer for return of the amount with interest and
compensation, the Commission passed an order directing the
Developer as under:
“The opposite party shall refund an amount of Rs.
2,06,41,379/- paid by the complainant along with interest
@ 9% p.a. from the date of last deposit before the due
date of possession till actual payment on the amount paid
before due date of possession and after this date if any
amount is deposited, then from the date of deposit till
actual payment.”

44
 29. For the reasons stated above, we are of the opinion that the
Commission has correctly exercises its power and jurisdiction in
passing the above directions for refund of the amount with
interest.”

14.7. A look at the decisions aforesaid makes it clear that though in

most of the cases, the questions were relating to the compensation for

delayed delivery of possession but even in the cases where possession

was not being delivered by the builder or not being taken by the

purchaser for a valid reason, the award of compensation was restricted to

the refund with simple interest in the range 6% to 9% p.a. The claim for

awarding compound interest, as in the case of Ireo Grace Realtech (P)

Ltd. (supra), was declined by this Court while observing that it had ‘no

nexus with the commercial realities of the prevailing market’.

The decision in Manjeet Kaur Monga’s Case and its connotations

15. We may now closely examine the decision of this Court in Dr.

Manjeet Kaur Monga’s case that has been the sheet anchor of the

entire consideration of the State Commission as also the National

Commission in awarding compensation in terms of compound interest.

The said decision has been strongly relied upon by the respondent while

the appellant has attempted to distinguish the same. Having regard to the

importance of the questions involved and for clarity on all the relevant

aspects, we deem it appropriate to reproduce the entire judgment of this

Court in Dr. Manjeet Kaur Monga with its extractions (even at the cost of

a little extra length of this judgment) as under: -

45
“Leave granted in SLPs (C) Nos. 10484-85 of 2016 and 10481-82
of 2016.
2. The appellant in Civil Appeals Nos. 5032-33 of 2016, who is the
legal representative of the original complainant, is before us
aggrieved by the order dated 3-8-2015 passed by the Competition
Appellate Tribunal, New Delhi (for short “the Tribunal”) in Manjeet
Kaur Monga v. K.L. Suneja [Manjeet Kaur Monga v. K.L. Suneja,
2015 SCC OnLine Comp AT 593], paras 37 and 42 to 44 of the
impugned order read as follows: (SCC OnLine Comp AT)
“37. The cancellation of allotment made in favour of the
complainant deserves to be declared as wholly arbitrary,
illegal and capricious. It is not in dispute that Smt
Gursharan Kaur had deposited three instalments including
the booking amount. The complainant, Dr (Ms) Manjeet
Kaur Monga deposited three other instalments (total Rs
4,53,850). She did not deposit further instalments because
the respondents did not complete the construction within
the stipulated time. For the first time a vague statement
about the construction was made in letter dated 26-12-
2001, which was issued after 12 years of the booking.
Even thereafter the respondents did not disclose the
stage-wise progress in the construction work and, as
mentioned above, they deliberately misconstrued the
complainant's protest dated 22-5-2002 as her
disinclination to take the flat. Between 2002 and 2005 i.e.
the date on which the cancellation letter was issued, the
respondents neither entered into any correspondence with
the complainant nor apprised her about the progress
made in the construction. Therefore, it must be held that
the complainant was justified in not paying further
instalments of price and the respondents committed grave
illegality by cancelling the allotment.
* * *
42. In my view, even though the Tribunal cannot, in view
of the law laid down in Ved Prakash Aggarwal
case [Ghaziabad Development Authority v. Ved Prakash
Aggarwal, (2008) 7 SCC 686], issue direction to the
respondents to deliver physical possession of the flat,
there is ample justification for awarding compensation by
invoking Section 12-B of the Act and even otherwise,
because the complainant and her legal representatives
have been subjected to harassment for the period of more
than 25 years. If the building had been completed within
three years as promised by the respondents, the
complainant may have got possession thereof and utilised
the same. She could not do so during her lifetime and her

46
legal representatives have been compelled to pursue this
litigation. 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
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 the needful is not done, then the legal
representatives of the complainant shall be entitled to file
appropriate application for execution of this order.”

47
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
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 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 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.
(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 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.
(3) The Commission may, after an inquiry made into the
allegations made in the application filed under sub-section

48
 (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 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 (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 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
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

49
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.
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.
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
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 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
respect of the issues remitted to the Tribunal.

50
 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.”

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
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

51
 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.
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
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.”

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 powers of

respective fora, shall be apposite and could be made as under:-

52
 Section 14(1)(d) of the Section 12-B(3) of the
Consumer Protection Act, MRTP Act
1986
To pay such amount as may The Commission may,
be awarded by it as after an inquiry made into
compensation to the the allegations made in the
consumer for any loss or application filed under sub-
injury suffered by the section (1), make an order
consumer due to the directing the owner of the
negligence of the Opposite undertaking or other
Party. person to make payment,
Provided that the District to the applicant, of the
Forum shall have the power amount determined by it as
to grant punitive damages in realisable from the
such circumstances as it undertaking or the owner
deems fit;8 thereof, or, as the case
may be, from the other
person, as 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.

16. 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

question of compensation or damages could be determined invariably by

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

8 The proviso aforesaid was inserted by Act 62 of 2002 with effect from 15.03.2003

53
envisaged by the agreement. In our view, the answer could only be in the

negative.

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

54
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.

17. 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.

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

55
therefrom. In Sanjay Singh (supra), a 3-Judge Bench of this Court has

explained these principles in clear terms as follows: -

“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.”

18. 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.

56
The complexities of present matter requiring further exploration

19. 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.

20. 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,

57
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 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: -

“30. Interest can be awarded in terms of an agreement or statutory

provisions. It can also be awarded by reason of usage or trade

58
 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
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.
(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 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.”

59
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.

21. 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 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

60
 restitution cannot be disputed, otherwise there can never be
restitution.”

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)
“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.

61
 We request the Law Commission to consider and recommend
necessary amendments in relevant laws.”

21.2. The observations aforesaid, as occurring in the referred 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.

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.

22. 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

62
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

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

63
awarding compound interest in the cases of monetary refund in such

dealings.

23. 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

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.

24. In our view, awarding of compound interest with reference to 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 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

64
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.

25. 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 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-apples” comparison and then factorising on the cost

of flats. In the first 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

65
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.

26. 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

9Malay 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.”

66
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.

In extraordinary measure, money received by respondent allowed to

be retained

27. 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

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.

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

67
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 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 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

68
exceed the amount of Rs. 2,48,52,000/- together with accrued interest,

which has already been received by the respondent pursuant to 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.

Conclusion

28. 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 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,

69
whether towards refund or towards compensation or towards interest. The

parties are left to bear their own costs of these appeals.

……....……………………. J.
(DINESH MAHESHWARI)

……....……………………. J.
(SANJAY KUMAR)
NEW DELHI;
APRIL 18, 2023.

70