Full Judgment Text
NON-REPORTABLE
2025 INSC 1149
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3988 OF 2023
RAJNESH SHARMA … APPELLANT
VS.
M/S. BUSINESS PARK TOWN PLANNERS LTD. … RESPONDENT
J U D G M E N T
DIPANKAR DATTA, J.
T HE A PPEAL
th
1. This appeal assails an order dated 13 January, 2023, passed by the
1
National Consumer Disputes Redressal Commission, New Delhi
disposing of a consumer complaint lodged before it by the appellant.
F ACTS
2. Facts in brief, necessary for the disposal of the present appeal, are as
follows:
th 2
a. On 10 March, 2006, the appellant booked a plot in a project of
the respondent named Park Land for a total sale consideration of
Rs. 36,03,692/- (basic price - Rs. 30,87,000/-). As
Signature Not Verified
Digitally signed by
JATINDER KAUR
Date: 2025.09.24
17:47:10 IST
Reason:
1
N CDRC
2
Plot bearing no. 2, Block G-4, Phase -2 admeasuring 343 square yards
1
advance/registration charges, Rs. 7,86,218/- was paid on the same
day.
th 3
b. On 11 December, 2007, a plot buyer agreement was executed
between the parties.
GREEMENT
c. As per clause 22 of the A , the possession of the plot was
to be handed over within 24 months of sanction of service plans of
the entire colony. Furthermore, clause 12 provided that time is of
the essence, and in case of default by the buyer, late payment
charges at 18% p.a. on the due amount, compounded at the time
of every succeeding instalment or three months, whichever is
earlier, would be levied by the respondent.
d. By April, 2011, the appellant had paid a sum of Rs. 28,79,065/-.
th
On 13 April, 2011, more than 5 (five) years after the first
payment, the respondent informed the appellant that due to
changes in the layout plan, it had decided to allot an alternative plot
to the appellant. Since the new plot was 7 sq. yards larger than the
original plot, the respondent further demanded a sum of Rs.
2,30,784/- as an additional amount. Accordingly, an addendum to
th
the A GREEMENT was executed between the parties on 13 April,
2011. Clause 7 of the A GREEMENT (discussed in the latter part of the
judgment) provided for allotment of an alternative plot if a change
in layout plan was required by any statutory authority.
3
A GREEMENT
2
th
e. The appellant on 11 March, 2015, paid a sum of Rs. 83,377.67,
out of which Rs. 83,300.76 was towards interest @ 18% p.a.
charged by the respondent for the appellant’s default in making the
payments.
rd
f. As per the statement of accounts dated 23 March, 2015 prepared
by the respondent, the appellant had paid a sum total of Rs.
43,13,312.67/-.
g. Aggrieved by the respondent’s inaction in allotting the plot, the
appellant terminated the A GREEMENT with the respondent vide letter
th
dated 27 March, 2017.
th
h. Thereafter, on 27 March, 2017, the appellant issued a legal notice
informing the respondent about such termination and seeking a
refund of Rs. 43,13,212/- along with 24% interest p.a. and a sum
of Rs. 72,30,000/- on account of loss of appreciation of property.
i. Ultimately, in April 2018, the appellant lodged the consumer
4
complaint before the N CDRC referred to in the opening paragraph.
j. After the lodging of the complaint, the respondent offered the
th
possession of the plot on 8 May, 2018, subject to payment of a
further amount of Rs. 7,60,900.33/-.
k. Vide the impugned order, the consumer complaint was disposed of
with directions to the respondent to refund the entire principal
amount of Rs. 43,13,212/- along with simple interest @ 9% p.a.
4
Consumer Case No. 885 of 2018
3
from the date of each payment till the date of refund. Additionally,
Rs. 25,000/- was awarded towards litigation costs to the appellant.
l. The said order is under challenge before this Court in this appeal at
the instance of the partly successful complainant.
MPUGNED RDER
I O
3. During the course of hearing before the N CDRC , learned counsel for the
respondent offered to repay the principal amount with 9% simple
interest per annum. This weighed with the N CDRC , and it ordered
accordingly without going into the merits of the case. It is imperative to
mention that the impugned order nowhere records that the appellant
accepted such an offer. Rather, the N CDRC disposed of the matter merely
based on the offer made by the counsel for the respondent.
S UBMISSIONS ON BEHALF OF THE A PPELLANT
4. It was submitted by Mr. Vivek Malik, learned counsel appearing for the
appellant, that the impugned order is liable to be set aside for more than
one reason. Inter alia , it was urged that:
CDRC
4.1 The N erred in forcing upon the appellant refund of the
principal amount paid by him with a meagre simple interest of 9%
p.a.
4.2 The appellant paid a total sum of Rs. 43,13,313/-, in instalments,
as and when demands were raised by the respondent. Despite
booking the plot in the year 2006, the possession thereof was not
4
delivered until 2018. In such view of the facts, interest @ 9% p.a.
was insufficient causing huge loss to the appellant.
4.3 Various additional costs were wrongly charged by the respondent,
because of which the appellant ended up paying Rs. 43,13,313/-,
whereas the initial sale consideration was Rs. 36,03,692/-. First ,
after allotting an alternative plot in 2011, the respondent
demanded a sum of Rs. 2,30,784/-, whereas since the alternative
plot was larger by only 7 sq. yards, the correct amount should
have been Rs. 73,283/- [Rs. 9,000 (basic rate) x 7 + Rs. 1024
(EDC) x 7 + Rs. 445 (IDC) x 7]. Secondly, the developer charged
Rs. 4,81,600/- under the head “Enhanced EDC”, which is over and
5 6
above the EDC and IDC specified in the A GREEMENT . Thirdly , on
th
11 March, 2015, four years after the last payment was made in
the year 2011, the respondent demanded a sum of Rs.
83,300.67/- towards “interest” on delayed payment without giving
any details as to how such an amount was arrived at. The appellant
paid the amounts, as demanded, as he did not want to be
embroiled in a dispute with the respondent.
4.4 After filing the consumer complaint, the respondent offered
th
possession of the plot on 8 May, 2018, but demanded a further
sum of Rs. 7,60,900.33/- [interest of Rs. 83,302/-, electricity and
STP charges of Rs. 3,13,250/-, utility connect charges of Rs.
5
External Development Charges
6
Infrastructure Development Charges
5
15,000, GST of Rs. 59,086/-, previous dues of Rs. 70,262.33/-
and stamp duty charges of Rs. 2,20,000]. After inviting our
attention to the payment plan contained in Schedule I (Schedule
of Costs) to the A GREEMENT , which contains details of all the
charges payable by the buyer, it was submitted that electricity and
STP charges do not find mention in the table and hence could not
have been demanded. Furthermore, the respondent sought to
charge GST, which was introduced in the year 2017, whereas all
the payments were made prior to 2012.
4.5 Preferential location charges (PLC) of Rs. 75,000/-, payable as per
Schedule I to the A GREEMENT , was paid by the appellant. However,
th
the respondent, in the offer letter dated 8 May, 2018, sought to
charge a sum of Rs. 3,15,000/-, which is unexplained.
4.6 Even after the passing of the impugned order, when the
respondent did not make payments within the timeline prescribed
by the N CDRC , the appellant (through his power of attorney)
approached the respondent for compliance with the impugned
order; however, the respondent refused to give money,
questioning the authenticity of the power of attorney.
4.7 Thus, the conduct of the respondent has been full of blemishes
throughout.
4.8 Finally, the respondent charged the appellant interest @ 18% p.a.
whereas agreed to give back to the appellant the principal amount
with 9% interest, which is in defiance of logic and reason.
6
Respondent, for its default, should have been judged by the same
standard and made to pay back 18% interest.
S UBMISSIONS ON BEHALF OF T HE R ESPONDENT
5. Per contra , learned senior counsel for the respondent Mr. Nayyar with
considerable vehemence supported the impugned order and made
fourfold submissions:
5.1 First , it was submitted that for grant of relief under the Consumer
7
Protection Act, 1986 , it is imperative for the consumer to prove
actual loss or injury to him due to neglect of the other party.
Reference was made to section 14 of the Act, which reads thus:
14. Finding of the District Forum.-
(l) If, after the proceeding conducted under section 13, the District
Forum is satisfied that the goods complained against suffer from any
of the defects specified in the complaint or that any of the allegations
contained in the complaint about the services are proved, it shall
issue an order to the opposite party directing him to do one or more
of the following things, namely:-
(a) …;
(b) …;
(c) …;
(d) to pay such amount as may be awarded by it as compensation to
the consumer for any loss or injury suffered by the consumer
due to the negligence of the opposite party;
*
(emphasis supplied by counsel)
Therefore, evidence must be led to prove actual loss suffered by
the consumer before the grant of compensation. Grant of
compensation cannot be beyond actual loss and cannot venture
into the territory of gain-based remedies. In the present case,
while the respondent’s claim for charging interest @ 18% on
7
the Act
7
default is supported by the A GREEMENT , the appellant’s claim for
grant of interest @ 18% cannot be sustained, as he did not lead
evidence to prove actual loss. In support of this proposition,
reliance was placed on the judgment of this Court in Ghaziabad
8
Development Authority v. Balbir Singh and Fortune
9
Infrastructure v. Trevor D’Lima .
5.2 Secondly , a consumer cannot, as a matter of routine, be
awarded compensation at the rate charged by the builder under
the contract. This Court has consistently granted a 9% interest
rate to the consumers for deficiency in services.
5.3 Thirdly , this Court has consistently rejected the claims of
consumers who claimed parity with builders in the interest
charged on delayed payments. Reliance was placed upon the
judgment of this court in IREO Grace Realtech (P) Ltd. v.
10
Abhishek Khanna where this Court held:
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
8
2004 5 SCC 65, para 8
9
2018 5 SCC 442, paras 19 and 25
10
(2021) 3 SCC 241
8
1943] . However, the order in these cases were passed prior to the
outbreak of the pandemic.
(emphasis supplied by the counsel)
11
Similarly, in Vidya v. Parsvnath Developers Ltd. , this
Court held:
19. Shri Jain therefore submitted that, applying the principle of
parity, the learned Commission ought to have awarded the interest
@ 24% p.a. It is submitted that, in any case the interest at the rate
of only 9% p.a. is not sustainable in law.
22. However, we find that, insofar as award of interest @ 9% p.a. is
concerned, the learned Commission was not justified in the facts of
the case to award a lesser interest than even the one agreed upon in
the agreement. Undisputedly, the facts of the case show that the
project was delayed inordinately. The appellant complainants were
made to suffer for long, for no fault of them. In spite of making the
entire payment, they were deprived of the possession within the
stipulated time.
23. In our view, the learned Commission, at least, ought to have
awarded interest @ 12% p.a. in view of Clause 7(b) of the
agreement.
24. In the result, the appeal is partly allowed. The direction made by
the learned Commission for refund of the entire amount deposited by
the appellant complainants is upheld. However, the direction with
regard to interest is modified to the extent that it shall be paid @
12% p.a. from the date of respective deposit till the date of refund.
The unpaid amount in terms of the aforesaid shall be paid within a
period of three months from the date of this judgment [Vidya v.
Parsvnath Developers Ltd., 2022 SCC OnLine NCDRC 522].
In Kolkata West International City Pvt. Ltd. v. Devasis
12
Rudra , the builder-buyer agreement imposed an interest rate
of 18% on the buyer for its delay in making payments, while
the interest rate imposed on the developer was the equivalent
of the prevailing savings bank interest of SBI. This Court found
11
(2024) 9 SCC 651
12
(2020) 18 SCC 613
9
the said agreement to be one-sided and modified the N CDRC ’s
order by reducing the interest rate from 12% p.a. to 9% p.a.
The relevant passage is reproduced below:
7. It is the above clause which is pressed in aid by the developer.
Under the aforesaid clause, any delay beyond 30-6-2009 would result
in the developer being required to pay interest at the prevailing
savings bank interest of State Bank of India. Interestingly, where the
buyer is in default, the agreement stipulates that interest @ 18%
from the date of default until the date of payment would be charged
for a period of two months, failing which the allotment would be
cancelled by deducting 5% of the entire value of the property. The
agreement was evidently one-sided. For a default on the part of the
buyer, interest @ 18% was liable to be charged. However, a default
on the part of the developer in handing over possession would make
him liable to pay interest only at the savings bank rate prescribed by
SBI. There is merit in the submission which has been urged by the
buyer that the agreement was one-sided. The clause which has been
extracted in the earlier part of this order will not preclude the right
and remedy available to the buyer to claim reasonable interest or, as
the case may be, compensation.
10. Having regard to all the facts and circumstances of the case, we
modify the order [ Kolkata West International City (P) Ltd. v. Devasis
Rudra , 2016 SCC OnLine Ncdrc 2411] of N CDRC by directing that the
appellant shall pay interest @ 9% p.a. to the respondent instead and
in place of 12% as directed by N CDRC . Save and except for the above
modification, we affirm the directions of N CDRC .
Similarly, in Pioneer Urban Land and Infrastructure Ltd. v.
13
Govindan Raghavan , this Court upheld an order of the
N CDRC which awarded simple interest of 10.7% even though,
as per the agreement, the builder was entitled to charge 18%
on delay in payments by the buyer.
13
(2019) 5 SCC 725
10
5.4 Fourthly , if the builder-buyer agreement is found to be one-
sided, it cannot be enforced, even at the instance of the buyer.
5.5 Lastly , the appellant’s allegation of demand of excessive amount
is unsustainable because: (i) the PLC was increased on account
of allotment of an alternative plot which was on a wider road and
had potential of commercial usage; (ii) the interest amount of
Rs. 83,300/- was charged on account of delayed payment by the
appellant for the period of 2007-2011, and no further interest
was charged; (iii) the electrification and STP charges were
GREEMENT
payable in terms of clause 2.5 (b) and 2.5 (c) of the A ;
and (iv) GST was charged only for the eligible charges levied for
th
the first time on 8 May 2018 (letter of offer of possession).
I SSUE
6. Whether on facts and in the circumstances of the present case, viz. the
terms of the agreement, the delay in offering possession, the conduct of
the respondent and the interest rate charged by the respondent for
default in payment by the appellant, the NCDRC erred in awarding delay
compensation @ 9% p.a. instead of a higher rate?
A NALYSIS
7. We start by analyzing the arguments raised by the respondent.
8. It was argued that this Court has consistently rejected the claim of parity
raised by buyers. Various judgments of this Court, which were cited,
have been noted. On perusal thereof, we find that in all such cases this
11
Court did not give elaborate reasons for rejecting the claim for parity but
reduced/increased the rate of interest based on other factors peculiar to
the facts and circumstances of each case, such as the prevailing market
conditions, lockdown due to COVID, et cetera .
9. To discuss a few, in IREO Grace Realtech Pvt. Ltd. (supra), this Court
did not consider the issue as to whether the buyer can claim parity with
the builder in interest rate for default. The buyer claimed interest @ 20%
p.a.; however, this Court denied the same finding it to be excessive as
per the prevailing commercial realities. Similarly in Vidya (supra), this
Court granted an interest rate of 12%, not by applying the principle of
parity but after finding that the grant of an interest rate of 9% by the
N CDRC , even when the agreement provided for a grant of interest of
12%, was very low.
10. Therefore, it cannot be said that this Court has always rejected the claim
of parity.
11. Suffice it to say, there is no principle of law that interest in default
charged by the builder can never be granted to the buyer.
12. Law is well settled that the amount of interest should be reasonable.
What is reasonable varies from case to case. The same is to be granted
considering the facts and circumstances of each case. The series of
judgments cited by the respondent to buttress its argument that this
Court has consistently granted interest @ 9% p.a. will make no
difference to the decision in this lis , as all the said cases were decided
in light of the peculiar facts of each case.
12
13. We now proceed to determine if the grant of interest awarded by the
N CDRC was reasonable considering the facts and circumstances of the
present case.
14. As per clause 22 of the A GREEMENT , possession of the plot was to be
handed over within 24 months of sanction of service plans of the entire
colony. Admittedly, no offer for possession was made until the year
2018. The conduct of the respondent in the interregnum is also worthy
of a discussion.
15. In April, 2011, the respondent invoked clause 7 of the A GREEMENT , and
allotted an alternative plot to the appellant. The reason cited for such
allotment was “due to changes in the layout plan”. Clause 7 of the
A GREEMENT reads as follows:
The Seller/Confirming Party is in the process of developing Parklands in
accordance with tentative and consolidated layout plan for the entire colony,
as submitted to the Statutory /Competent Authority for final approval,
which have been explained to and understood by the Purchaser(s).
However, if any changes in the said layout plan and/or drawings are
required by any statutory authority(s) of Govt., Or otherwise, the same may
be effected suitably, to which the Purchaser(s) hereby agrees and has given
his consent to the Seller to carry out the same.
Provided, however, if as a result thereof, there by any change in the
location, preferential location, number, boundaries or area of the said Plot,
the same shall be valid and binding on the Purchaser(s). Further, if there is
any increase or decrease in the area of the said Plot, revised price shall
proportionally be determined by the Seller/Confirming Party on the basis of
the original price.
If any preferentially located Plot, ceases to be so located, the
Seller/Confirming Party will be liable only to refund without interest such
extra charges paid by the Purchaser(s), for such preferential location. The
Purchaser shall not raise any objection and shall have no claim monetary or
otherwise of any nature whatsoever in this regard.
16. Clause 7 provides that the location of the plot may be changed if the
government or any statutory authority requires a change in the existing
layout plan. During arguments, we enquired of Mr. Nayyar for the
13
respondent to show the basis for invoking clause 7 of the A GREEMENT ,
i.e., to show us that the layout plan was sought to be changed by the
government or statutory authority. In answer thereto, it was submitted
that the alternative allotment was made in the year 2011; however, till
2018, the appellant raised no demur as regards the same. The answer
is neither here nor there. Whether or not the appellant raised a demur
is not relevant for validation of the respondent’s conduct. Also, the basis
for offering such alternative allotment has not been disclosed in the
written submissions filed by the respondent.
17. Be that as it may, the possession of the alternative plot (allotted in the
year 2011) was offered only in the year 2018.
18. Having noted thus, we agree with Mr. Nayyar that before compensation
can be granted by the N CDRC , actual loss must be proved to have been
suffered by the consumer. The objective of granting compensation
cannot be altered such that it amounts to a windfall gain to the other
party. Proof of actual loss would require evidence to be tendered, for, it
is a guiding lamp for grant of compensation. Be that as it may, in this
case, we are not deciding the actual loss suffered by the appellant. We
are only concerned with deciding the rate of interest to be awarded to
the appellant on the principal amount paid by him to the respondent.
19. Keeping in mind the overall conduct of the respondent: the delay caused
by it in offering the plot, the fact that the respondent charged the
appellant delay compensation @ 18% p.a. on the due amount, and the
long wait that the appellant had to endure over a period of a decade,
14
causing harassment and anxiety, which are writ large, we find that this
is an appropriate case where refund of the principal amount with interest
@ 9% p.a., as awarded by the N CDRC , will not serve the ends of justice.
20. In view of the conduct of the respondent, it cannot be permitted to
escape with a nominal liability for its default, while it charged interest @
18% on default committed by the appellant. Although, the rate of
interest charged by the builder cannot be granted to the buyer as a rule
of thumb, however, in the present case, equity and fairness demands
that the respondent be put to the same rigours for charging 18% interest
and face consequences similar to those imposed on the appellant for
default committed by him. If we hold otherwise, we will be perpetuating
a manifestly wrong bargain.
21. We, therefore, substitute the rate of interest awarded by the N CDRC and
increase it from 9% to 18% per annum, while keeping the other terms
intact. Respondent shall refund the requisite amount within a period of
two months from date.
22. The appeal is, accordingly, partly allowed, without any order for costs.
………..…………………J.
(DIPANKAR DATTA)
…………..…………..………………J.
(AUGUSTINE GEORGE MASIH)
NEW DELHI;
SEPTEMBER 24, 2025.
15
2025 INSC 1149
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3988 OF 2023
RAJNESH SHARMA … APPELLANT
VS.
M/S. BUSINESS PARK TOWN PLANNERS LTD. … RESPONDENT
J U D G M E N T
DIPANKAR DATTA, J.
T HE A PPEAL
th
1. This appeal assails an order dated 13 January, 2023, passed by the
1
National Consumer Disputes Redressal Commission, New Delhi
disposing of a consumer complaint lodged before it by the appellant.
F ACTS
2. Facts in brief, necessary for the disposal of the present appeal, are as
follows:
th 2
a. On 10 March, 2006, the appellant booked a plot in a project of
the respondent named Park Land for a total sale consideration of
Rs. 36,03,692/- (basic price - Rs. 30,87,000/-). As
Signature Not Verified
Digitally signed by
JATINDER KAUR
Date: 2025.09.24
17:47:10 IST
Reason:
1
N CDRC
2
Plot bearing no. 2, Block G-4, Phase -2 admeasuring 343 square yards
1
advance/registration charges, Rs. 7,86,218/- was paid on the same
day.
th 3
b. On 11 December, 2007, a plot buyer agreement was executed
between the parties.
GREEMENT
c. As per clause 22 of the A , the possession of the plot was
to be handed over within 24 months of sanction of service plans of
the entire colony. Furthermore, clause 12 provided that time is of
the essence, and in case of default by the buyer, late payment
charges at 18% p.a. on the due amount, compounded at the time
of every succeeding instalment or three months, whichever is
earlier, would be levied by the respondent.
d. By April, 2011, the appellant had paid a sum of Rs. 28,79,065/-.
th
On 13 April, 2011, more than 5 (five) years after the first
payment, the respondent informed the appellant that due to
changes in the layout plan, it had decided to allot an alternative plot
to the appellant. Since the new plot was 7 sq. yards larger than the
original plot, the respondent further demanded a sum of Rs.
2,30,784/- as an additional amount. Accordingly, an addendum to
th
the A GREEMENT was executed between the parties on 13 April,
2011. Clause 7 of the A GREEMENT (discussed in the latter part of the
judgment) provided for allotment of an alternative plot if a change
in layout plan was required by any statutory authority.
3
A GREEMENT
2
th
e. The appellant on 11 March, 2015, paid a sum of Rs. 83,377.67,
out of which Rs. 83,300.76 was towards interest @ 18% p.a.
charged by the respondent for the appellant’s default in making the
payments.
rd
f. As per the statement of accounts dated 23 March, 2015 prepared
by the respondent, the appellant had paid a sum total of Rs.
43,13,312.67/-.
g. Aggrieved by the respondent’s inaction in allotting the plot, the
appellant terminated the A GREEMENT with the respondent vide letter
th
dated 27 March, 2017.
th
h. Thereafter, on 27 March, 2017, the appellant issued a legal notice
informing the respondent about such termination and seeking a
refund of Rs. 43,13,212/- along with 24% interest p.a. and a sum
of Rs. 72,30,000/- on account of loss of appreciation of property.
i. Ultimately, in April 2018, the appellant lodged the consumer
4
complaint before the N CDRC referred to in the opening paragraph.
j. After the lodging of the complaint, the respondent offered the
th
possession of the plot on 8 May, 2018, subject to payment of a
further amount of Rs. 7,60,900.33/-.
k. Vide the impugned order, the consumer complaint was disposed of
with directions to the respondent to refund the entire principal
amount of Rs. 43,13,212/- along with simple interest @ 9% p.a.
4
Consumer Case No. 885 of 2018
3
from the date of each payment till the date of refund. Additionally,
Rs. 25,000/- was awarded towards litigation costs to the appellant.
l. The said order is under challenge before this Court in this appeal at
the instance of the partly successful complainant.
MPUGNED RDER
I O
3. During the course of hearing before the N CDRC , learned counsel for the
respondent offered to repay the principal amount with 9% simple
interest per annum. This weighed with the N CDRC , and it ordered
accordingly without going into the merits of the case. It is imperative to
mention that the impugned order nowhere records that the appellant
accepted such an offer. Rather, the N CDRC disposed of the matter merely
based on the offer made by the counsel for the respondent.
S UBMISSIONS ON BEHALF OF THE A PPELLANT
4. It was submitted by Mr. Vivek Malik, learned counsel appearing for the
appellant, that the impugned order is liable to be set aside for more than
one reason. Inter alia , it was urged that:
CDRC
4.1 The N erred in forcing upon the appellant refund of the
principal amount paid by him with a meagre simple interest of 9%
p.a.
4.2 The appellant paid a total sum of Rs. 43,13,313/-, in instalments,
as and when demands were raised by the respondent. Despite
booking the plot in the year 2006, the possession thereof was not
4
delivered until 2018. In such view of the facts, interest @ 9% p.a.
was insufficient causing huge loss to the appellant.
4.3 Various additional costs were wrongly charged by the respondent,
because of which the appellant ended up paying Rs. 43,13,313/-,
whereas the initial sale consideration was Rs. 36,03,692/-. First ,
after allotting an alternative plot in 2011, the respondent
demanded a sum of Rs. 2,30,784/-, whereas since the alternative
plot was larger by only 7 sq. yards, the correct amount should
have been Rs. 73,283/- [Rs. 9,000 (basic rate) x 7 + Rs. 1024
(EDC) x 7 + Rs. 445 (IDC) x 7]. Secondly, the developer charged
Rs. 4,81,600/- under the head “Enhanced EDC”, which is over and
5 6
above the EDC and IDC specified in the A GREEMENT . Thirdly , on
th
11 March, 2015, four years after the last payment was made in
the year 2011, the respondent demanded a sum of Rs.
83,300.67/- towards “interest” on delayed payment without giving
any details as to how such an amount was arrived at. The appellant
paid the amounts, as demanded, as he did not want to be
embroiled in a dispute with the respondent.
4.4 After filing the consumer complaint, the respondent offered
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possession of the plot on 8 May, 2018, but demanded a further
sum of Rs. 7,60,900.33/- [interest of Rs. 83,302/-, electricity and
STP charges of Rs. 3,13,250/-, utility connect charges of Rs.
5
External Development Charges
6
Infrastructure Development Charges
5
15,000, GST of Rs. 59,086/-, previous dues of Rs. 70,262.33/-
and stamp duty charges of Rs. 2,20,000]. After inviting our
attention to the payment plan contained in Schedule I (Schedule
of Costs) to the A GREEMENT , which contains details of all the
charges payable by the buyer, it was submitted that electricity and
STP charges do not find mention in the table and hence could not
have been demanded. Furthermore, the respondent sought to
charge GST, which was introduced in the year 2017, whereas all
the payments were made prior to 2012.
4.5 Preferential location charges (PLC) of Rs. 75,000/-, payable as per
Schedule I to the A GREEMENT , was paid by the appellant. However,
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the respondent, in the offer letter dated 8 May, 2018, sought to
charge a sum of Rs. 3,15,000/-, which is unexplained.
4.6 Even after the passing of the impugned order, when the
respondent did not make payments within the timeline prescribed
by the N CDRC , the appellant (through his power of attorney)
approached the respondent for compliance with the impugned
order; however, the respondent refused to give money,
questioning the authenticity of the power of attorney.
4.7 Thus, the conduct of the respondent has been full of blemishes
throughout.
4.8 Finally, the respondent charged the appellant interest @ 18% p.a.
whereas agreed to give back to the appellant the principal amount
with 9% interest, which is in defiance of logic and reason.
6
Respondent, for its default, should have been judged by the same
standard and made to pay back 18% interest.
S UBMISSIONS ON BEHALF OF T HE R ESPONDENT
5. Per contra , learned senior counsel for the respondent Mr. Nayyar with
considerable vehemence supported the impugned order and made
fourfold submissions:
5.1 First , it was submitted that for grant of relief under the Consumer
7
Protection Act, 1986 , it is imperative for the consumer to prove
actual loss or injury to him due to neglect of the other party.
Reference was made to section 14 of the Act, which reads thus:
14. Finding of the District Forum.-
(l) If, after the proceeding conducted under section 13, the District
Forum is satisfied that the goods complained against suffer from any
of the defects specified in the complaint or that any of the allegations
contained in the complaint about the services are proved, it shall
issue an order to the opposite party directing him to do one or more
of the following things, namely:-
(a) …;
(b) …;
(c) …;
(d) to pay such amount as may be awarded by it as compensation to
the consumer for any loss or injury suffered by the consumer
due to the negligence of the opposite party;
*
(emphasis supplied by counsel)
Therefore, evidence must be led to prove actual loss suffered by
the consumer before the grant of compensation. Grant of
compensation cannot be beyond actual loss and cannot venture
into the territory of gain-based remedies. In the present case,
while the respondent’s claim for charging interest @ 18% on
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the Act
7
default is supported by the A GREEMENT , the appellant’s claim for
grant of interest @ 18% cannot be sustained, as he did not lead
evidence to prove actual loss. In support of this proposition,
reliance was placed on the judgment of this Court in Ghaziabad
8
Development Authority v. Balbir Singh and Fortune
9
Infrastructure v. Trevor D’Lima .
5.2 Secondly , a consumer cannot, as a matter of routine, be
awarded compensation at the rate charged by the builder under
the contract. This Court has consistently granted a 9% interest
rate to the consumers for deficiency in services.
5.3 Thirdly , this Court has consistently rejected the claims of
consumers who claimed parity with builders in the interest
charged on delayed payments. Reliance was placed upon the
judgment of this court in IREO Grace Realtech (P) Ltd. v.
10
Abhishek Khanna where this Court held:
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
8
2004 5 SCC 65, para 8
9
2018 5 SCC 442, paras 19 and 25
10
(2021) 3 SCC 241
8
1943] . However, the order in these cases were passed prior to the
outbreak of the pandemic.
(emphasis supplied by the counsel)
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Similarly, in Vidya v. Parsvnath Developers Ltd. , this
Court held:
19. Shri Jain therefore submitted that, applying the principle of
parity, the learned Commission ought to have awarded the interest
@ 24% p.a. It is submitted that, in any case the interest at the rate
of only 9% p.a. is not sustainable in law.
22. However, we find that, insofar as award of interest @ 9% p.a. is
concerned, the learned Commission was not justified in the facts of
the case to award a lesser interest than even the one agreed upon in
the agreement. Undisputedly, the facts of the case show that the
project was delayed inordinately. The appellant complainants were
made to suffer for long, for no fault of them. In spite of making the
entire payment, they were deprived of the possession within the
stipulated time.
23. In our view, the learned Commission, at least, ought to have
awarded interest @ 12% p.a. in view of Clause 7(b) of the
agreement.
24. In the result, the appeal is partly allowed. The direction made by
the learned Commission for refund of the entire amount deposited by
the appellant complainants is upheld. However, the direction with
regard to interest is modified to the extent that it shall be paid @
12% p.a. from the date of respective deposit till the date of refund.
The unpaid amount in terms of the aforesaid shall be paid within a
period of three months from the date of this judgment [Vidya v.
Parsvnath Developers Ltd., 2022 SCC OnLine NCDRC 522].
In Kolkata West International City Pvt. Ltd. v. Devasis
12
Rudra , the builder-buyer agreement imposed an interest rate
of 18% on the buyer for its delay in making payments, while
the interest rate imposed on the developer was the equivalent
of the prevailing savings bank interest of SBI. This Court found
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(2024) 9 SCC 651
12
(2020) 18 SCC 613
9
the said agreement to be one-sided and modified the N CDRC ’s
order by reducing the interest rate from 12% p.a. to 9% p.a.
The relevant passage is reproduced below:
7. It is the above clause which is pressed in aid by the developer.
Under the aforesaid clause, any delay beyond 30-6-2009 would result
in the developer being required to pay interest at the prevailing
savings bank interest of State Bank of India. Interestingly, where the
buyer is in default, the agreement stipulates that interest @ 18%
from the date of default until the date of payment would be charged
for a period of two months, failing which the allotment would be
cancelled by deducting 5% of the entire value of the property. The
agreement was evidently one-sided. For a default on the part of the
buyer, interest @ 18% was liable to be charged. However, a default
on the part of the developer in handing over possession would make
him liable to pay interest only at the savings bank rate prescribed by
SBI. There is merit in the submission which has been urged by the
buyer that the agreement was one-sided. The clause which has been
extracted in the earlier part of this order will not preclude the right
and remedy available to the buyer to claim reasonable interest or, as
the case may be, compensation.
10. Having regard to all the facts and circumstances of the case, we
modify the order [ Kolkata West International City (P) Ltd. v. Devasis
Rudra , 2016 SCC OnLine Ncdrc 2411] of N CDRC by directing that the
appellant shall pay interest @ 9% p.a. to the respondent instead and
in place of 12% as directed by N CDRC . Save and except for the above
modification, we affirm the directions of N CDRC .
Similarly, in Pioneer Urban Land and Infrastructure Ltd. v.
13
Govindan Raghavan , this Court upheld an order of the
N CDRC which awarded simple interest of 10.7% even though,
as per the agreement, the builder was entitled to charge 18%
on delay in payments by the buyer.
13
(2019) 5 SCC 725
10
5.4 Fourthly , if the builder-buyer agreement is found to be one-
sided, it cannot be enforced, even at the instance of the buyer.
5.5 Lastly , the appellant’s allegation of demand of excessive amount
is unsustainable because: (i) the PLC was increased on account
of allotment of an alternative plot which was on a wider road and
had potential of commercial usage; (ii) the interest amount of
Rs. 83,300/- was charged on account of delayed payment by the
appellant for the period of 2007-2011, and no further interest
was charged; (iii) the electrification and STP charges were
GREEMENT
payable in terms of clause 2.5 (b) and 2.5 (c) of the A ;
and (iv) GST was charged only for the eligible charges levied for
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the first time on 8 May 2018 (letter of offer of possession).
I SSUE
6. Whether on facts and in the circumstances of the present case, viz. the
terms of the agreement, the delay in offering possession, the conduct of
the respondent and the interest rate charged by the respondent for
default in payment by the appellant, the NCDRC erred in awarding delay
compensation @ 9% p.a. instead of a higher rate?
A NALYSIS
7. We start by analyzing the arguments raised by the respondent.
8. It was argued that this Court has consistently rejected the claim of parity
raised by buyers. Various judgments of this Court, which were cited,
have been noted. On perusal thereof, we find that in all such cases this
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Court did not give elaborate reasons for rejecting the claim for parity but
reduced/increased the rate of interest based on other factors peculiar to
the facts and circumstances of each case, such as the prevailing market
conditions, lockdown due to COVID, et cetera .
9. To discuss a few, in IREO Grace Realtech Pvt. Ltd. (supra), this Court
did not consider the issue as to whether the buyer can claim parity with
the builder in interest rate for default. The buyer claimed interest @ 20%
p.a.; however, this Court denied the same finding it to be excessive as
per the prevailing commercial realities. Similarly in Vidya (supra), this
Court granted an interest rate of 12%, not by applying the principle of
parity but after finding that the grant of an interest rate of 9% by the
N CDRC , even when the agreement provided for a grant of interest of
12%, was very low.
10. Therefore, it cannot be said that this Court has always rejected the claim
of parity.
11. Suffice it to say, there is no principle of law that interest in default
charged by the builder can never be granted to the buyer.
12. Law is well settled that the amount of interest should be reasonable.
What is reasonable varies from case to case. The same is to be granted
considering the facts and circumstances of each case. The series of
judgments cited by the respondent to buttress its argument that this
Court has consistently granted interest @ 9% p.a. will make no
difference to the decision in this lis , as all the said cases were decided
in light of the peculiar facts of each case.
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13. We now proceed to determine if the grant of interest awarded by the
N CDRC was reasonable considering the facts and circumstances of the
present case.
14. As per clause 22 of the A GREEMENT , possession of the plot was to be
handed over within 24 months of sanction of service plans of the entire
colony. Admittedly, no offer for possession was made until the year
2018. The conduct of the respondent in the interregnum is also worthy
of a discussion.
15. In April, 2011, the respondent invoked clause 7 of the A GREEMENT , and
allotted an alternative plot to the appellant. The reason cited for such
allotment was “due to changes in the layout plan”. Clause 7 of the
A GREEMENT reads as follows:
The Seller/Confirming Party is in the process of developing Parklands in
accordance with tentative and consolidated layout plan for the entire colony,
as submitted to the Statutory /Competent Authority for final approval,
which have been explained to and understood by the Purchaser(s).
However, if any changes in the said layout plan and/or drawings are
required by any statutory authority(s) of Govt., Or otherwise, the same may
be effected suitably, to which the Purchaser(s) hereby agrees and has given
his consent to the Seller to carry out the same.
Provided, however, if as a result thereof, there by any change in the
location, preferential location, number, boundaries or area of the said Plot,
the same shall be valid and binding on the Purchaser(s). Further, if there is
any increase or decrease in the area of the said Plot, revised price shall
proportionally be determined by the Seller/Confirming Party on the basis of
the original price.
If any preferentially located Plot, ceases to be so located, the
Seller/Confirming Party will be liable only to refund without interest such
extra charges paid by the Purchaser(s), for such preferential location. The
Purchaser shall not raise any objection and shall have no claim monetary or
otherwise of any nature whatsoever in this regard.
16. Clause 7 provides that the location of the plot may be changed if the
government or any statutory authority requires a change in the existing
layout plan. During arguments, we enquired of Mr. Nayyar for the
13
respondent to show the basis for invoking clause 7 of the A GREEMENT ,
i.e., to show us that the layout plan was sought to be changed by the
government or statutory authority. In answer thereto, it was submitted
that the alternative allotment was made in the year 2011; however, till
2018, the appellant raised no demur as regards the same. The answer
is neither here nor there. Whether or not the appellant raised a demur
is not relevant for validation of the respondent’s conduct. Also, the basis
for offering such alternative allotment has not been disclosed in the
written submissions filed by the respondent.
17. Be that as it may, the possession of the alternative plot (allotted in the
year 2011) was offered only in the year 2018.
18. Having noted thus, we agree with Mr. Nayyar that before compensation
can be granted by the N CDRC , actual loss must be proved to have been
suffered by the consumer. The objective of granting compensation
cannot be altered such that it amounts to a windfall gain to the other
party. Proof of actual loss would require evidence to be tendered, for, it
is a guiding lamp for grant of compensation. Be that as it may, in this
case, we are not deciding the actual loss suffered by the appellant. We
are only concerned with deciding the rate of interest to be awarded to
the appellant on the principal amount paid by him to the respondent.
19. Keeping in mind the overall conduct of the respondent: the delay caused
by it in offering the plot, the fact that the respondent charged the
appellant delay compensation @ 18% p.a. on the due amount, and the
long wait that the appellant had to endure over a period of a decade,
14
causing harassment and anxiety, which are writ large, we find that this
is an appropriate case where refund of the principal amount with interest
@ 9% p.a., as awarded by the N CDRC , will not serve the ends of justice.
20. In view of the conduct of the respondent, it cannot be permitted to
escape with a nominal liability for its default, while it charged interest @
18% on default committed by the appellant. Although, the rate of
interest charged by the builder cannot be granted to the buyer as a rule
of thumb, however, in the present case, equity and fairness demands
that the respondent be put to the same rigours for charging 18% interest
and face consequences similar to those imposed on the appellant for
default committed by him. If we hold otherwise, we will be perpetuating
a manifestly wrong bargain.
21. We, therefore, substitute the rate of interest awarded by the N CDRC and
increase it from 9% to 18% per annum, while keeping the other terms
intact. Respondent shall refund the requisite amount within a period of
two months from date.
22. The appeal is, accordingly, partly allowed, without any order for costs.
………..…………………J.
(DIPANKAR DATTA)
…………..…………..………………J.
(AUGUSTINE GEORGE MASIH)
NEW DELHI;
SEPTEMBER 24, 2025.
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