Consumer Protection Act, 1985 – Compensation – Liability of the Development Authority to pay interest on the loan taken by the buyers for delay in delivery of flats/plots – On facts, consumer complaint by the buyer for refund of money paid on account of delay in delivery of flat – Direction by the State Commission to the Development Authority to refund the entire amount deposited by the buyers in respect of securing flats along with 8% interest and additional costs for mental harassment, litigation and the interest paid by buyers to the Bank for the loans secured to arrange for the funds to be invested in the project – Appeal thereagainst dismissed – Interference with, as regards the award of interest on the loan taken by buyers to be paid to the Development Authority: Held: Commission was to compute an amount as compensation, in which one of the factors would be that in order to secure a property in the scheme floated by the Development Authority, the buyers had taken out a loan and would be liable to pay interest thereon – However, this order does not permit the interest on the loan, in its entirety, to be saddled by the authority responsible for the housing scheme and the delay – Orders of the Commissions does not reveal any exceptional or strong reasons for the interest on the loan taken by the buyers to be paid by the Development Authority – Whether the buyers of the flat do so by utilizing their savings, taking a loan for such purpose or securing the required finances by any other permissible means, is not a consideration that the developer of the project is required to keep in mind – The one who is buying a flat is a consumer, and the one who is building it is a service provider – That is the only relationship between the parties – If there is a deficiency or delay in service, the consumer is entitled to be compensated for the same – Repayment of the entire principal amount along with 8% interest thereon, as stipulated in the contract, alongside the clarification that there would be no other liability on the authority, sufficiently meets this requirement – Amount of interest awarded is the compensation to the investment maker for the amount of money and the time he has been denied the fruits of that investment – 8% interest awarded on the entire amount that is being invested, is the compensation for being deprived of the investment of money – Apart from this no amount of interest on the loan taken by the buyers could have been awarded. [Paras 13, 15, 17, 18]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Nidhi Jain. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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