JAYA NARSIMHAN Vs. DELHI DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) The main question posed before us is whether the interest allowed @ 7% per annum on the delayed construction of a flat is justified in the face of interest charged @ 18% per annum on delayed payment by the allottees. This can be best appreciated in the backdrop of the facts of the present case. Pursuant to 5th Self Financing Housing Registration Scheme, 1982 announced by the respondent i. e. , Delhi Development Authority, the applicant applied for registration for a category-II flat consisting of two bed rooms, a living room, kitchen, toilet etc. This was vide Application No.35169 dated 13.8.1982. The applicant deposited a sum of Rs.10,000.00 towards registration amount on 13.8.1982. The draw was held on 14.12.1983 and it was allotted a flat in category-II in Third Pocket-A-Sec-A, Vasant Kunj. The intimation was given on 15.1.1984. The applicant paid an amount of Rs.1,44,588.40 in four equal instalments on 30.12.1982 whereafter on communication of a further demand of Rs.34,499.25 (the revised cost at Rs.1,82,100/-), the same was paid on 13.5.1988. The possession of the flat was, however, given on 3.9.1990. For the delay in handing over the possession of the flat beyond 2 years i. e. , the time for completion of flat, the applicant seeks compensation in the form of interest @ 18% per annum for delay in construction of the flat.

(2.) The respondent has filed reply wherein it is specifically averred in paragraph No.6 that there were a large number of flats which were being constructed under the 5th Self Financing Scheme and the work was got executed through different agencies/contractors. The respondent Authority made its best efforts to ensure that all the work is executed as per the expected time schedule. However, there were certain delays in construction of certain flats on account of the contractors for that particular pocket/area not executing the work in time. The respondent's delay being not for malafide reasons, no interest is contended to be payable. On completion of the pleadings, the following issues were framed : (i) Whether the respondent has been indulging in unfair trade practices as alleged in the compensation application (ii) Whether any loss or damage has been caused to the applicant as a result of these alleged unfair trade practices (iii) Relief, if any. Evidence in the form of affidavit/counter affidavit of the parties was filed.

(3.) The main contention of the applicant is that having charged interest @ 18% on the delayed payment of instalments, respondent by paying 7% on the delay in handing over the possession beyond 2 years, has indulged in unfair trade practices within the meaning of Sec.36a of the Act. Admittedly, both the parties have subjected themselves to terms and conditions of the agreement as accompanied with the Fifth Self Financing Housing Registration Scheme, 1982. As held by their Lordships of the Hon'ble Supreme Court in the case of Bareilly Development Authority and Anr. V/s. Ajay Pal Singh and Ors., 1989 AIR(SC) 1076, when the contract entered into by the State is non-statutory and purely contractual the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines the rights and obligations of the parties inter-se. In this sphere, the parties can only claim rights conferred upon them by the contract in the absence of any statutory obligations on the part of the Authority in the said contractual field.