RAINBOW REALTORS Vs. SOLOMON ESAU DAVID

JUDGEMENT

(1.) In this revision by the opposite party-developer, challenge is to the order dated 24.8.2009 of Consumer Disputes Redressal Commission Maharashtra State, Mumbai partly allowing appeal against the order dated 3.1.2009 of a District Forum and setting aside award of compensation of Rs. 2 lakhs towards reduction of flat area. The District Forum had allowed the complaint with direction to the petitioner to hand over possession of flat no. 701 or to refund amount of Rs. 5,00,000/- with interst @ 21% p.a. from 18.7.1994 and pay Rs. 2,00,000/-, towards reduction of the flat area from 750 sq. ft. to 500 sq. ft. etc. to the respondent/complainant. Vide order dated 10.11.2009, notice was issued in the revision limited to rate of interest. Thrust of argument advanced by Ms. Ashta Tyagi, Adv. for the petitioner is that for purchase of flat the respondent had entered into an agreement with the petitioner on 4th August 1994 and under clause 10 of this agreement in the event of possession of the flat not being given the respondent is entitled to interest on deposited amount @ 9% p.a. Further, under Section 8 of Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale Management and Transfer) Act, 1963, the petitioner is liable to pay simple interest @ 9% p.a. on the deposited amount. In support of the submission, reliance has been placed on the decisions in Bharathi Knitting Co. vs. DHL Worldwide Express Courier Division of Airfreight Ltd., 1996 4 SCC 704& G. Swaminathan vs. Shivram Co-operative Housing Society & Ors., 1983 2 BCR 548. On the other hand, contention advanced by Shri I.S. Suri for the respondent is that as the respondent was not given the flat and petitioner had enjoyed amount of Rs. 5,00,000/- paid on 18.7.1994 all these years, the orders passed by fora below awarding interest @ 21% p.a. may not be disturbed. Having gone through clause 10 of the agreement dated 4th August, 1994 Section 8 of the aforesaid Act and the two decisions, we are of the view that the respondent is entitled to interest only @ 9% instead of 21% p.a. on said amount of Rs. 5,00,000/-. Order passed by fora below awarding interest at the said rate, therefore, cannot be legally sustained.

(2.) Accordingly, while allowing revision, aforesaid orders passed by fora below are modified to the extent that the petitioner is liable to pay interest on Rs. 5,00,000/- @ 9% instead of 21% p.a. No order as to cost.