1.       This appeal has been filed under section 19 of The Consumer Protection Act, 1986 in challenge to the Order dated 03.12.2018 of the State Commission in complaint no. 801 of 2017.

2.       Heard the learned counsel for the appellant (the ‘builder co.’) and the learned counsel for the respondent (the ‘complainant’). Also perused the record, including inter alia the State Commission’s impugned Order dated 03.12.2018 and the memorandum of appeal.

3.       The matter pertains to a builder-buyer dispute.

          The State Commission has made its appraisal of the case and has arrived at the findings that the offer of possession of the subject unit was made after abnormal unreasonable delay of over 04 years beyond the assured and committed period (“12 - - - In view of the afore-extracted clause, it is clear that possession of the unit was to be delivered to the complainant within a maximum period of 36 months from the date of signing of the Agreement. In the instant case, the Agreement was executed between the parties on 12.06.2008, and, as such, possession was to be delivered to the complainant latest by 11.06.2011. However, the Opposite Party sent letter of intimation of possession dated 12.08.2015. (Annexure C-10) i.e. after a delay of more than four years.”).

          It has ordered for refund of the amount of Rs. 36,72,843/- deposited by the complainant with simple interest at the rate of 12% per annum from the respective dates of deposit till realisation within 45 days of receipt of its Order with the stipulation that if the payment is not made within the said period the rate of interest shall stand enhanced to 15% per annum in place of 12% per annum. It has further ordered for lumpsum compensation of Rs.1,00,000/- for mental agony and harassment within 45 days of receipt of its Order with the stipulation that if the payment is not made within the said period the said lumpsum compensation shall carry simple interest at the rate of 15% per annum from the date of filing of the complaint till realization. It has also awarded Rs. 33,000/- as cost of litigation.

4.       We find that the State Commission has passed a well-appraised and reasoned Order. It has dismissed the preliminary objections with reasons recorded, and has also aptly dealt with the substantive matter after duly appraising and weighing the evidence.

5.       The findings of the State Commission are not being agitated by the learned counsel for the builder co. during the course of arguments today. Learned counsel submits on instructions that the builder co. does not want to contest the refund ordered or the undisputed principle that just and equitable compensation too ought to be awarded. His submission is that the builder co. only wishes to contest the quantum of compensation which has been awarded by the State Commission. As such we do not find it necessary to write a detailed critique on the findings of the State Commission, since the same are not even being assailed on behalf of the builder co.

6.       The builder co. concedes that it is dutybound to refund the amount deposited by the complainant as also to provide just and equitable compensation. The only question which survives for consideration is regarding the fairness and reasonableness of the quantum of compensation awarded by the State Commission.

7.       Learned counsel for the builder co. submits that the compensation awarded by the State Commission by way of interest on the deposited amount and by way of lumpsum amount is on the higher side. In the opinion of the learned counsel rate of interest of not more than 9% per annum on the deposited amount would suffice as just and equitable compensation. His submission is that the rate of interest of 12% per annum on the deposited amount ought to be reduced to 9% per annum and the lumpsum compensation of Rs. 1,00,000/- ought to be totally done away with.

8.       In rebuttal learned counsel for the complainant submits that the complainant made the deposits between the period 2008 to 2011 but the possession was not offered till as late as 2015, even though it was promised to be delivered by 2011. Not even the occupancy certificate was obtained by the builder co. till 2014, which was a prerequisite for making any meaningful legitimate offer of possession to the consumer. Moreover the builder co. did not refund the complainant’s deposited amount on expiry of the assured and committed period in 2011 but kept on unduly and unjustifiably retaining it in an indefinite manner. He also emphasizes that the findings in the State Commission’s impugned Order which unequivocally determined ingredients of ‘deficiency’ on the part of the builder co. are beyond reproach and are not even being assailed on behalf of the builder co. since they have been given on the basis of proven unassailable facts and evidence. The submission is that in the totality of the matter, considering the troubles and travails, uncertainty and difficulty, mental agony and physical harassment suffered by the complainant for no fault of his, the quantum of compensation awarded by the State Commission is fair and reasonable. Learned counsel however further submits that even though the award made by the State Commission is just and equitable in the facts and circumstances of the case, the complainant would not seriously object if the stipulations of enhancing the rate of interest from 12% per annum to 15% per annum on the deposited amount and levying interest at the rate of 15% per annum on the lumpsum compensation in case of default and delay in payment are dispensed with. The submission is that the complainant is prepared to forego the benefit of enhanced rate of interest on the deposited amount and of interest on the lumpsum compensation in the hope that this concession may put a period to the lis and she would at least now be able to get her due.  

9.       We have carefully considered the submissions made by the learned counsel at the bar.

10.     In respect of quantum of compensation, the sole question which is being agitated on behalf of the builder co., considering the overall facts and circumstances of the case, the manifest ‘deficiency’ on the part of the builder co. in neither offering possession within the assured and committed period nor making refund of the amount deposited by the complainant but highhandedly and capriciously retaining the same in an indefinite way without any legitimate right to do so, and considering the incessantly continuing troubles and travails being faced by the complainant, we feel that the rate of interest of 12% per annum on the deposited amount of Rs. 36,72,843/- from the respective dates of deposit till actual realisation along with lumpsum compensation of Rs. 1,00,000/-, is, in all fairness, just and equitable, and commensurate with the loss and injury suffered by the complainant. 

11.    As such we modify the award made by the State Commission to the extent that the deposited amount of Rs. 36,72,843/- shall be refunded to the complainant with simple interest at the rate of 12% per annum from the respective dates of deposit till actual realization along with Rs. 1,00,000/- as lumpsum compensation as well as Rs. 33,000/- as cost of litigation.

12.     The amount if any deposited by the builder co. with the State Commission in compliance of this Commission’s Order dated 08.08.2019 along with interest if any accrued thereon shall be forthwith released by the State Commission to the complainant as per the due procedure. The balance awarded amount as per the award modified hereinabove shall be made good by the builder co. within six weeks from today, failing which the State Commission shall forthwith undertake execution, for ‘enforcement’ and for ‘penalty’, as per the law.

13.     Learned counsel for the complainant draws attention to the Order dated 02.03.2022 of this Commission in E.A. No. 122 of 2019 in C.C. No. 2123 of 2016, the Order dated 11.10.2018 of this Commission in F.A. No. 531 of 2016 and other connected F.A.s and the Order dated 19.03.2021 of Hon’ble High Court of Delhi in OMP (ENF.) (COMM.) 64/2018 & IA No. 5231/2018, EA 960/2019, EA 194/2020, EA 196/2020, EA 988/2020 & EA 1236 of 2020 and  submits that the builder co. may be directed not to deduct tax at source on the compensation since the same is not legitimately admissible.

          Learned counsel for the builder co. does not make any submission in rebuttal.

14.     As such the builder co. is directed to comply with the observations made by this Commission as contained in paras 10 to 14 of its Order dated 02.03.2022, which are being reproduced below for reference:

10.     Where compensation is quantified or computed “by way of interest” on the deposited amount, i.e. when the term “interest” is involved in the formula or yardstick for arriving at a (just and equitable) compensation under section 14(1)(d) of the Consumer Protection Act, the context and meaning of the term “interest” is distinctly different from the context and meaning of the said term as used in section 194A of the Income Tax Act. And it can in no way be treated as “interest on compensation or on enhanced compensation” as contained in section 56(2)(viii) of the Income Tax Act.

11.       The award of compensation under section 14(1)(d) of the Consumer Protection Act is in relation to both ‘goods’ and ‘services’ as well as in relation to all the different types of ‘services’ under the purview of the Act including the ‘service’ of ‘housing construction’. It may or may not be computed by using “interest” as the formula or yardstick for computation. Just because in a particular case or in relation to a particular ‘service’ “interest” is used in a formula or yardstick to compute the compensation it does not imply that the very use or allusion to the term “interest” will cause the provisions of section 194A of the Income Tax Act to be attracted. Also, in so far as the provisions of section 56(2)(viii) of the Income Tax Act are concerned, this is not at all a case of “income by way of interest received on compensation or on enhance compensation” but is too obviously a case of “compensation” per se.

12.       We may clarify that we are neither adding to or subtracting from the Income Tax Act. If a person is responsible to pay income-tax on any revenue or capital receipt under the said Act, he will be so liable.

13.       We have amply clarified already hereinabove that the “compensation” awarded under the Consumer Protection Act is for the “loss or injury suffered” and is universally applicable to both ‘goods’ and ‘services’ inclusive of the ‘service’ relating to ‘housing construction’. Thus in the ‘service’ of ‘housing construction’, if, in a particular case, “compensation” is computed “by way of interest” on the deposited amount it shall not be differently treated than the other cases in which the term “interest” may not at all be used in computing the compensation. The context and meaning of the term “interest” if used in the mode of calculation or a formula or yardstick adopted for computing compensation under section 2(1)(d) of the Consumer Protection Act is identifiably different from the context and meaning as used in section 194A of the Income Tax Act. 

14.       As such there was no justification for deducting tax at source in the instant case.

15.    Nothing further remains to be adjudicated.

          So disposed.

16.     The Registry is requested to send a copy each of this Order to the parties in the appeal and to their learned counsel as well as to the State Commission immediately. The stenographer is also requested to upload this Order on the website of this Commission immediately.