Supreme Court: In exercising the civil appellate jurisdiction, the division bench of M.R. Shah and S. Ravindra Bhat* J.J., set aside the impugned order of the Tribunal and dismissed the appeal filed by the complainant and held that the impugned order was neither rested on any principle of law nor any statutory provision. The bench further stated that the amount deposited with the Registry should be deposited with banks to avoid loss and asked Courts and Judicial forums to frame guidelines.
In the matter at hand, the dispute was between the original home buyer’s legal representative (‘LR’) and the builder of the group housing scheme called ‘Siddharth Shila Apartments’ located in Ghaziabad, Uttar Pradesh.
Despite paying seven installments in lieu of the allotment letter, the builder issued a letter cancelling the allotment since the LR resisted the payment of the eighth and ninth instalments as there were no intimation about the progress of work and delivery of possession of flat. Along with the cancellation letter, the builder enclosed a Pay Order towards the full refund of the payment made by the allotee and subsequently the LR.
In retaliation, the LR issued notice to the builder stating that she was always ready and willing to pay the installments towards the allotted flat, but it was the builder who had violated the timeline of delivery of possession and quality of construction. Therefore, the LR had demanded a compensation amount from the builder and returned the Pay Order given by him. She further sent a cheque for Rs 1,00,000/- expressing willingness to pay the price of the flat.
Legal Trajectory
The LR went on to file a complaint under section 36 of the Monopolies and Restrictive Trade Practices Act, 1969 (‘MRTP Act’) alleging unfair trade practice by the builder and applied under Section 12-A of the MRTP Act seeking to restraint the builder from alienating the flat. The MRTP Commission had consequently restricted the builder from creating third party interest with respect to the flat.
In resistance, the builder contended that the LR had failed to deposit payments in accordance with the plan in the allotment letter and that she had, in terms of her May 2022 letter, shown disinclination to take possession of the flat by alleging breach of confidence on the part of the builder.
In the year 2009, the MRTP Act was repealed by Section 66 of the Competition Act, 2002, therefore, the pending matters before the MRTP Commission were transferred to the Competition Appellate Tribunal (‘COMPAT’). Having regard to the evidence produced, COMPAT held the builder guilty of unfair trade practice under Section 36-A(1) (i), (ii) & (ix) of the MRTP Act and held that the complainant was justified in not paying further instalments and that the builder had committed illegality by cancelling the allotment.
The said order was affirmed by the Supreme Court regarding the compensation to the LR in terms of the formula adopted by the COMPAT and the matter was remitted back to COMPAT to address the rest of the issues, with directions to implead the necessary parties.
Analysis and Conclusion
The bench after considering the pleadings and other material points for consideration noted that the complainant had nowhere stated before the MRTP Commission, that the original Pay Order was attached with the pleadings nor the index to the pleadings in the complaint referred to the Pay Order. It was only when for the first time when this was highlighted in the previous proceedings, that the builder sought and obtained permission to apply to the COMPAT for revalidation which was eventually revalidated in June 2016.
The bench noted that since the Pay Order in question had become stale, funds were moved to its ‘Unclaimed Sundry Account’ and did not attract any interest in terms of the Reserve Bank of India directions. Accordingly, the funds were credited back to the account of the builder in June 2016. It was viewed that the Tribunal was swayed by all these circumstances and held that the builder was liable for unfair trade practice and was thus directed to pay compensation.
The Supreme Court opined that the impugned order was neither rested on any principle of law nor any statutory provision. It appeared that the Tribunal was swayed by the complainant’s plight and no order contemporaneously were sought from the MRTP Commission, which would have protected the interests of the complainant with respect to the money received even while ensuring that her contentions on the merits with respect to entitlement towards the flat were preserved.
The bench was of the view that the provisions of Order XXI of Code of Civil Procedure, 1908 (‘CPC’) were applicable to decrees of civil court. If the amount was deposited or paid to the decree holder or person entitled to it, the person entitled to the amount cannot later seek interest on it. However, the debtor, or person required to pay or refund the amount, is under an obligation to ensure that the amount payable is placed at the disposal of the person entitled to receive it.
The Court noted that the complainant was aware that the Pay Order had been tendered by the builder to her and she had filed the original Pay Order with her complaint but did not seek any order from the MRTP Commission at the relevant time nor the pleadings in the complaint disclosed that the Pay Order was filed in the Commission, to enable the builder to respond appropriately. Therefore, the bench agreed with the builder ‘s argument that the rule embodied in Order XXI, Rule 4 of CPC, was applicable and the builder could not be fastened with any legal liability to pay interest after April 2005.
The Bench, therefore, disagreed with the complainant’s argument that on account of the omission of the builder, she was wronged, and was thus entitled to receive interest. The records nowhere disclosed any fault on the part of the builder, but it was the complainant who did not take steps to protect her interests.
The bench relied upon Sailen Krishna Majumdar v. Malik Labhu Masih, (1989) 1 SCR 817 and held that in such cases, even if equities are equal, the Court should not intervene. Therefore, in the present case the complainant could not claim interest from the builder, who had returned the Pay Order, thus, no equities could be extended to her aid.
The Court declared the contention of the complainant, that the impugned order was in error as untenable because the interest payable for the past period was concluded in the previous proceedings. The complainant did not point to any rule or binding legal principle which obliged the builder to pay such interest, or justify the direction in the impugned order, by showing how such liability arose in the facts and circumstances of this case.
The bench opined that all courts and judicial forums should frame guidelines in cases where amounts deposited with the office or registry of the court or tribunal, should mandatorily be deposited in a bank or some financial institution, to ensure that no loss is caused in the future. Therefore, the Court while setting aside the impugned order, allowed the builder ‘s appeal and dismissed the appeal filed by the complainant.
[K.L. Suneja v. Dr. Manjeet Kaur Monga through her LR, 2023 SCC OnLine SC 91, decided on 31-01-2023]
*Judgment authored by Justice S.R. Bhat.
Advocates who appeared in this case:
For the petitioner- Advocate Mohit Paul;
For the Respondent- Advocate Gaurav Goel and Advocate Chanchal Kumar Ganguli.
*Simran Singh, Editorial Assistant summated the data.
