This revision petition has been filed by the petitioner Telecom Employees Housing Co-operative Society Ltd. against the order dated 11.01.2018 of the State Consumer Disputes Redressal Commission, Karnataka, (in short ‘the State Commission’) passed in Appeal No.1376 of 2016.

2.      Brief facts of the case relevant for deciding the present petition are that the respondent is a member of the petitioner Co-operative Society Ltd. and he deposited Rs.4,80,000/- on 03.03.2007 and Rs.2,40,000/- on 24.6.2010.  The total amount Rs.7,20,000/- for getting a site.  The main issue involved in this revision petition is in respect of the interest to be given to the respondent on the deposited amount.

3.      Heard the learned counsel for the parties and perused the record.  The learned counsel for the petitioner stated that the respondent is a member of the petitioner Co-operative Society Ltd. and he deposited Rs.4,80,000/- on 03.03.2007 and Rs.2,40,000/- on 24.6.2010.  The Society in its general body meeting passed a resolution on 21.04.2015 that there would be some price increase in per sq.ft. of the property.  The respondent did not agree to this proposal and asked for refund of his deposited amount.  The petitioner Society has already refunded him the total amount of Rs.7.20,000/- on 10.06.2015 that was deposited by the complainant.  However, the respondent filed a consumer complaint before the District Consumer Disputes Redressal Forum, Bangalore (in short ‘the District Forum’) for interest on the refunded amount.  The District Forum vide its order dated 19.05.2016 directed the opposite party/petitioner to pay 18% interest per annum on Rs.7,20,000/- from the date of respective deposits.  The petitioner preferred an appeal before the State Commission bearing appeal No.1376/2016.  The State Commission has however dismissed the appeal.

4.      Hence the present petition has been filed.

5.      Learned counsel for the petitioner argued that there was no contract or agreement between the parties to pay any interest on the deposited amount.  As the petitioner is a Co-operative Society, it survives only on the contributions of its members and cannot pay any interest to the members on their deposited amounts.  As there was no agreement to pay any interest, however, the petitioner Society is even ready to pay the interest at the rate of bank deposits.  It is not possible for the Society to bear the burden of 18% p.a. interest as it does not have any resources of its own.

6.      On the other hand learned counsel for the respondent stated that both the fora below have given a concurrent finding and the scope under the revision petition is very limited.  There has been a huge delay in giving the possession of the property and therefore, the interest is payable by the petitioner Society on the amount deposited with the Society.  The refund was asked as the Society was not in a position to hand over possession of the site to the complainant within a reasonable time.  After considering all the facts and circumstances, the District Forum had ordered refund with interest @18% p.a. and the same has been upheld by the State Commission. 

7.      I have considered the arguments advanced by both the learned counsel for the parties and have examined the record.  It is not denied that the amount of Rs.7.20,000/- has been paid by the complainant/respondent and the present revision petition is limited only to the interest thereon.  As there was no agreement between the parties, the circumstances of refund and interest are not being governed by any particular contract.  Unlike builders Society has not entered into the agreement with the complainant that if the payment is delayed a particular percentage of interest shall be charged.  Similarly, no agreement is to the effect that if the amount is refunded a particular interest shall be paid.  It is clear that the Society is liable to pay interest on the deposited amount even if there is no agreement between the parties because the money has been retained by the Society over a time.  The payment of interest is supported by the decision of the Hon’ble Supreme Court in Alok Shanker Pandey Vs. Union of India &Ors., II (2007) CPJ 3 (SC) where the Apex Court 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.”

8.      Now, only question for consideration in the present revision petition remains about the rate of interest.  Obviously, 18% p.a. interest is on a very high side and presently this rate of interest is not being awarded in most of the cases, which are being handled by this Commission relating to builder-buyers disputes. Very low interest rate equal to saving bank rate or FD bank rate is also not acceptable as the complainant has been finally denied of the property as held by the Hon’ble Supreme Court in  Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65, by observing the following:-

“That compensation cannot be uniform and can best be illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered 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 returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore the compensation in such cases would necessarily have to be higher…”        

9.      Keeping the legal position and facts and circumstances of the case in view, I deem it appropriate to allow interest @ 10% p.a. on the deposited amount from the respective dates of deposits till actual refund. 

10.    Based on the above discussion, the revision petition is partly allowed and the order dated 11.01.2018 of the State Commission and order dated 19.05.2016 of the District Form stand modified to the extent that interest shall be @10% p.a. instead of 18% p.a. as ordered by the District Forum.  Rest of the order of the District Forum remains unchanged.  It is made clear that this total interest became payable on the date of refund i.e. on 10.06.2015, hence, the petitioner Society would also be liable to pay interest on the total amount of interest that became due on 10.6.2015 at a rate of 6% from 10.6.2015 till actual date of payment of interest. No order as to cost for this revision petition.