This first appeal has been filed by the petitioners Emaar MGF Land Ltd. & Anr. against the order dated14.05.2015 of the State Consumer Disputes Redressal Commission, UT Chandigarh (in short ‘the State Commission’) passed in CC No.28 of 2015.

2.      Brief facts of the case are that in the year 2006, the appellant herein came out with a project “Mohali Hills”, comprising of various sectors in Mohali Hills including 105, 108 & 109, an integrated master-planned township  with luxury villas, apartments, terraced town homes, plots, golf course, clubs and commercial spaces.  On 06.09.2006, one Mr. Surjit Singh applied for booking of a plot admeasuring 300 sq.yds in the project of the appellants by depositing a sum of Rs.10,35,000/- as token amount.  On 04.07.2007, appellants entered into a plot Buyer’s agreement with the said Mr. Surjit Singh for the said plot No.244 in Augusta Park, in Sector 109 admeasuring 300 sq. yds for a total sale consideration of Rs.40,50,354/-.  On 14.02.2008, the said Mr. Surjit Singh entered into an agreement to sell with the respondents in respect to the said plot and the said plot got transferred in the name of the respondents.  The respondents also filled up an application for allotment.  By the year 2012, respondents paid a sum of Rs.38,55,354/- against the total consideration of Rs.40,50,354/- for the said plot. It is the case of the appellants that the appellants offered possession of the said plot to the respondents vide letter dated 28.09.2012 subject to payment of the outstanding amounts.  However, the respondents failed to respond to the said offer and did not take the possession of the plot.  On 23.01.2015, appellants again offered possession of the said plot to the respondents subject to payment of the outstanding amount.  It is at this stage also that the respondents failed to adhere to the said letter and did not come forward to take possession of the said plot.  On 10.02.2015, respondents proceeded to file a consumer complaint before the State Commission alleging deficiency on the part of the appellants on various grounds.  Resisting the complaint the appellants filed their written statement.  However, the State Commission allowed the consumer complaint No.28 of 2015 vide order dated 14.05.2015 as under:-

“18.   For the reasons, recorded above, the complaint is partly accepted, with costs, and the opposite parties are jointly and severally held liable and directed in the following manner:-

(i)       To refund the amount of Rs.34,50,319/- i.e. [Rs.38,55,354.00 (amount paid) minus (-) Rs.4,05,035.00 being 10% of Rs.40,50,354.00], to the complainants, alongwith interest @9% per annum, from the respective dates of deposits, till realization, within 45 days, from the date of receipt of a certified copy of this order.

(ii)      To pay an amount of Rs.1,50,000/-(Rupees One Lac Fifty Thousand only), to the complainants, as compensation for mental agony and physical harassment, within a period of 45 days from the date of receipt of a certified copy of the order.

(iii)    Housing Development Finance Corporation Limited (HDFC) shall have the first charge, on the amount to be refunded, to the complainants, by the Opposite Parties, to the extent, the amount is due to it, against the complainants as it (HDFC) advanced loan in their (complainants) favour for part payment of the price of plot, in question under the Tripartite Agreement dated 13.04.2009 (Annexure R-3).

(iv)   To pay cost of litigation, to the tune of Rs.15,000/-, to the complainants.

(v)   In case, the payment of amounts, mentioned in Clause (i) and (ii), is not made, within the stipulated period, then the Opposite Parties, shall be liable to pay the amount mentioned in Clause (i) above, with interest @ 12% per annum, instead of 9% p.a., from the respective dates of deposits, till realization and amount mentioned in Clause (ii) above, with interest @ 12% per annum from the date of default, besides payment of costs, to the tune of Rs.15,000/-.

3.      Hence the present appeal.

4.      Heard the learned counsel for the parties and perused the record.

5.      Learned counsel for the appellants stated that the main grievance of the appellant is that the State Commission has awarded 9% interest on the refund amount, whereas no interest is payable as per Clause 2 (f) of the agreement on which the State Commission has relied and has allowed deduction of earnest money.  Learned counsel stated that as per this clause 30% of the total cost was to be treated as earnest money, however, the State Commission has allowed only 10% deduction as earnest money on the basis of judgment of this Commission in DLF vs. Bhagwanti Narula, RP No.3860 of 2014, decided on 06.01.2015.

6.      Learned counsel for the appellants further stated that the agreement is binding on both the parties and if the money is to be refunded then 30% of the total cost should be treated as earnest money and the State Commission should have allowed the same to have been forfeited.  The learned counsel argued that the State Commission has not discussed the issue of interest in whole body of its judgment and in the last straightaway has ordered 9% interest to be paid.  No reason has been given by the State Commission for awarding interest on the refund amount.  The State Commission has further awarded Rs.1,50,000/- as compensation to the complainant.  If the compensation has been awarded, the interest cannot be awarded as the interest is also in the form of compensation.

7.      It was also asserted by the learned counsel for the appellants that the appellants are not the original allottee and are not entitled to interest on any of the amounts paid by the original allottee. In respect of his argument, learned counsel referred to the judgment of Haryana Urban Development Authority Vs.  Diwan Singh, (2010) 14 SCC 770.  It has been held that:-

“8. One significant aspect to be noticed is that respondent is not the allottee who was allotted the plot in 1990, but a re-allottee who was re-allotted the plot in April 1998. When he was offered possession of the plot in May 1998, he found that a part of it was used for purposes of road. Thereafter, the appellant even offered an alternative plot. The respondent however rushed to the District Forum in 1999, hardly within a year of re-allotment. The allegations of inordinate delay, negligence, harassment on the part of appellant, in a complaint filed by a re-allottee, within one year of re-allotment, appears to be hollow and without merit. In this factual background, having regard to the principles laid down in Ghaziabad Development Authority vs. Balbir Singh [2004 (5) SCC 65], Haryana Urban Development Authority vs. Darsh Kumar [2005 (9) SCC 449] and Bangalore Development Authority vs. Syndicate Bank [2007 (6) SCC 711], the award of interest was not warranted. A re-allottee in 1998 cannot obviously be awarded interest from 1992 on the amounts paid by the original allottee in 1990 on the ground that the original allottee was not offered delivery in 1990.”

8.      On the other hand, the learned counsel for the respondents/complainants stated that possession was to be given by 03.07.2010 and it has been alleged by the opposite parties that the possession was offered on 28.09.2012, whereas this letter was never received by the complainants and in fact the possession was offered by the appellants on 23.01.20015. As the possession was getting late, the complainants filed complaint for refund of the amount.  The opposite parties/appellants kept the money of the respondents for such a long time and did not offer the possession and enjoyed the money for their own benefit.  The appellants are liable to pay interest on this amount.  It was further pointed out by the learned counsel for the complainants that the complainants have suffered lot of mental agony and harassment by the opposite parties as neither the possession was given, nor the amount was refunded.  In these circumstances, the State Commission has rightly ordered a compensation of Rs.1,50,000/- to be paid to the complainants.

9.      I have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties and have examined the record.  As this has already been decided in DLF vs. Bhagwanti Narula (supra) that the earnest money cannot be more than 10% of the total consideration and no contrary judgment has been shown by the learned counsel for the appellants, I do not find any ground to interfere with the order of the State Commission in respect of allowing deduction of 10% of the total consideration as earnest money.  So far as question of interest is concerned, it is undisputed that the money remained with appellants/opposite parties for a long time and the possession was not handed over as per the stipulation made in the agreement.  It is true that clause 2 (f) of the agreement only deals with the earnest money and its forfeiture, it does not mention anything about the interest.  Hon’ble Supreme Court in Alok Shanker Pandey Vs. Union of India &Ors., II (2007) CPJ 3 (SC)  has held that:-

“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.  For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount.  Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period.  Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B.”

10.    From the above judgment of the Hon’ble Supreme Court, it is clear that if the money is kept with the opposite parties and if the amount is to be refunded, it is to be refunded with interest.  This Commission has been generally ordering refund of the deposited amount with 10-12% interest p.a.  Accordingly, the interest @9% p.a. seems quite reasonable.  Accordingly, I do not find any illegality in the order dated 14.05.2015 of the State Commission with respect to award of interest @9% p.a.

11.    It is true that the interest is also in the form of compensation as observed by the Hon’ble Supreme Court in Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65, I am of the view that the State Commission was not justified in ordering separate compensation of Rs.1,50,000/- to the complainants.  In fact complainants filed the complaint when the letter of possession was issued by the opposite parties.  The complainants may have taken the possession, however, they asked refund and the refund has been allowed by the State Commission with deduction of their earnest money.  Thus, clearly the complainants are not entitled for any separate compensation for harassment and mental agony. It is seen that the complainants are the subsequent purchaser from the original allottee and their names were entered on 14.02.2008 and definitely the complainants are not entitled to any interest before this date in the light of the judgment of the Hon’ble Supreme Court in Haryana Urban Development Vs. Diwan Singh, (supra).

12.    On the basis of the above examination, I do not find any error in the order dated 14.5.2015 of the State Commission so far as it relates to the refund of the paid amount after deducting 10% of the total consideration as earnest money along with 9% p.a. interest.  As the complainants name was entered on 14.02.2008, no interest will be payable from before that date.  Even though the money must have been paid by the earlier allottee before this date but on the amount paid by the earlier allottee, the complainants shall be given interest only from14.02.2008.       The order of the State Commission with respect to award of compensation of Rs.1,50,000/-is set aside.  The first appeal No.496 of 2015 is accordingly disposed of.  The order of the State Commission as modified by this order be complied within a period of 45 days from the date of this order, failing which,  appellants shall pay interest @12% p.a. from the date of this order till actual payment.  The order relating to cost of Rs.15,000/- is maintained.