Case Note & Summary
The appeal arose from a decision by the National Consumer Disputes Redressal Commission, which ordered the Chandigarh Housing Board (CHB) and M/s. Parasvanath Developers Pvt. Ltd. to pay a total of Rs. 1,03,31,250/- to the complainant, along with interest and compensation for mental harassment and litigation costs. The complainant had applied for a five-bedroom apartment in a project that was never commenced, leading to a demand for a refund. The National Commission found both CHB and the Developer liable for the delay and directed them to pay the amounts in a specified ratio. The appeal contested the liability of CHB for the compensation and the increase in interest rate. The court examined the Tripartite Agreement and the arbitration award, concluding that the Developer was primarily responsible for the breach, but CHB also bore some liability. The court upheld the National Commission's decision on both the compensation and the interest rate, emphasizing the discretionary nature of the Commission's powers. The appeal was dismissed, and CHB was directed to pay its share of the awarded amounts within a specified timeframe.
Headnote
A) Consumer Protection - Liability for Compensation - Apportionment of Liability - Consumer Protection Act, 1986 - The National Commission directed CHB and the Developer to pay compensation for mental harassment and litigation costs in the ratio of 70:30, affirming that both parties were liable for the breach of the Development Agreement. Held that the liability for compensation under Clause 9(c) of the Tripartite Agreement did not apply as the Developer failed to commence construction (Paras 10-12). B) Consumer Protection - Interest Rate Determination - Consumer Protection Act, 1986 - The National Commission increased the interest rate from 9% p.a. to 10% p.a. on the principal sum, which was upheld as a discretionary power exercised by the Commission in light of the circumstances of the case. Held that the increase was justified (Paras 14-15).
Issue of Consideration
Whether the National Commission was correct in directing payment of mental harassment and litigation costs in the ratio of 70:30, and whether the interest rate was rightly increased from 9% p.a. to 10% p.a.
Final Decision
The Supreme Court dismissed the appeal, affirming the National Commission's order for CHB and the Developer to pay the principal sum of Rs. 1,03,31,250/- at 10% p.a. and Rs. 2 lakhs for mental harassment and litigation costs in the ratio of 70:30. CHB was directed to pay its share of the awarded amounts within eight weeks.
Law Points
- Consumer protection
- liability for compensation
- arbitration award
- interest rate determination
